Umahi opposes collection of VAT by state govts.

Governor David Umahi of Ebonyi State on Friday opposed the collection of Value Added Tax (VAT) by state governments. The Ebonyi governor, therefore, urged   governors to soft pedal in the VAT crisis between state governments and the Federal Inland Revenue Service (FIRS).

Umahi argued that if the collection of VAT is taken away from the FIRS, several states will be starved of funds while a few states will be the beneficiaries. He said that governors should be their brothers’ keepers.

According to Umahi when he spoke on a Channel television programme monitored from Lagos by National Daily on Friday: “Even if you have all the money in the world, you will not be able to use it. So, it is very important, and it is coming at a very bad time.

“I’m pleading with my colleagues to sheathe their swords, let us pass through this challenging moment before we start looking at who is right or wrong.

“We have to be our brother’s keeper; we have to see how we can grow the economies of the weakest states, otherwise we will breed a lot of insecurities to those super states; this is very important.”

Governor Umahi argued that before states should be allowed to collect VAT, the ‘weakest states’ must be provided with enough resources to give them a comparative advantage.

The governor stated that Federal Government should take 15 per cent share of the VAT collected and 85 per cent be shared to state governments.

Again, Governor Umahi argued: “Now, the Federal Government and the super states will be the most beneficiaries, and a number of states will collapse and by the reason of rampant law.

“I am also encouraging the Federal Government to look the way of Ebonyi State, we are highly disadvantaged.

“You say we should grow the economy, with what? We don’t have money to grow the economy. “We have agriculture, we have solid minerals, and our solid minerals are being stolen away. “Ebonyi State should be pitied, we’re in a very difficult situation. We have a lot of our youths unemployed.”

Governor Nyesom Wike of Rivers State had engaged the FIRS in lawsuit over collection of VAT in Rivers State after signing into law an Act of the Rivers State House of Assembly empowering the state government to collect VAT.

The FIRS had challenged the state law, and thereafter, the judgement of the Federal High Court, Port Harcourt, Rivers State.

The Lagos State government is on the trail of Rivers State as Governor Babajide signed an Act of the Lagos State House of Assembly empowering the state government to collect VAT into law. Lagos State government further applied to be joined as co-respondent in the suit at the Court of Appeal filed by FIRS.