Cross River State Government has expressed concern about the impact of the ongoing argument over the right of states or the Federal Government on the collection of Value Added Tax (VAT).
Speaking with The Nation, the Commissioner for Finance, Mr. Asuquo Ekpeyong Jnr, said if the Rivers State court ruling on VAT collection subsists, a new dimension will set in on VAT administration.
He said: “The Value Added Tax administration may take a new dimension if the Rivers State court ruling of 9/8/2021 subsists. This will no doubt send ripple effects to other states as we see in the case of Lagos State House of Assembly bill on collecting VAT.”–
The commissioner added: “While we are aware of the Federal Government’s move to challenge this development, Cross River State Government will begin to look inward to examine and work out modalities on how to receive directly the portion on non-import VAT accruable from businesses operating within the state.”
He noted that “the existing VAT regime in Nigeria as overseen by the Federal Internal Revenue Service (FIRS) favours almost all states of the federation, including Cross River State. This is evident in the FAAC disbursed among the states since the inception of the VAT decree in 1993. It is pertinent to note that Lagos State, which is estimated to generate over 50 per cent of VAT federation receipts, harbours most of the corporate headquarters, who mostly pay their VAT through their head offices, e.g. banks, telcos, multinationals, etc. Yet these organisations are operating in many, if not in all states of the federation.”
Ekpeyong Jnr said: “The proposed VAT administration, if implemented, means that Cross River State Government must be well positioned to boost its Internally Generated Revenue.
“The state is implementing the policies that will improve our IGR and cushion the impact the new VAT regime will have on our financial commitments.”