The four tax reform bills proposed by President Bola Tinubu have passed second reading at the Senate. The bills specifically seek to review the sharing formula of the Value Added Tax (VAT) to accommodate what each state will get for what is consumed within their territory.
This writeup will help you understadn what the bill is all about.....
''Northern States are gradually losing significant portion of their shares of FAAC allocation, which is undoubtedly the biggest source of their revenue. From Local Government Funds, Fiscal Reform Bills, to dividends from the NLNG shares of NNPC and today, the National Lottery. All these were part of the pool that makes up the monthly national cake distribution known as Federal Accounts and Allocation Committee.
These developments are not surprising to any student of development. We all saw it coming.
Early this year, the Supreme Court, in a suit filed by the Federal Government, scrapped the States and Local Government joint account which before then entrusted local government funds in the hands of their respective States.
In another case, the Supreme Court also agreed with the argument of the AGF and held that NNPC's stake (shareholding) in the NLNG, unlike the NNPC itself, actually belongs to the Federal Government alone and not the entire Federation. Those billions of dollars accrued to NNPC from NLNG annually are not to be shared anymore with the States as part of FAAC.
Similarly VAT, a chunk part of the non-oil revenue, currently being shared based on equity, derivation and population formula amongst FG, States and Local Government will, if the Emilokan's Executive Bill succeeds at the National Assembly, now be shared based on derivation or consumption or both. Either way, I don't see how the north can benefit from it. I will get to the reason shortly.
Then came today, another blow in a Suit initiated by Lagos State Government, the Learned Justices of the Supreme Court while granting all the reliefs sought by the AG of Lagos State held that revenues accrued to the Federation through the National Lottery Commission from the regulation and royalties of lottery and other online games is in reality within the Residual Legislative List, exclusive to States to regulate and generate revenues from.
I believe there may be more of these seemingly harsh interpretations of the law in the nearest future. Because that is what the Constitution actually contemplated.
If you put these chain of events together, you would only come to one conclusion: that full federalism is taking a crude shape in the country, against the wish of everyone. Had we, northerners, been thoughtful and proactive, we would have prepared for this time. We would have confronted the issue of restructuring with strategy rather than our usual rejectionist attitude, to achieve it on our terms and put a timeline for gradual implementation in order to minimise it's impact. With our sell-out NASS members, who either do not appreciate where all this is headed or they have been bought to look away, it's only a matter of time. Allah ya ji kan Senator Suke Yaro Gandi and the rest of his contemporary visionaries and patriots.
What should we expect now? Our FAAC reliant States will receive shorter allocation. If VAT is to be shared based on derivation, then most of the Corporate Headquarters of businesses where the remittance of VAT takes place are far away from the north. What if it's to be shared based on consumption? The follow up question is: how do you determine the end users when you don't have the data to prove where it is consumed? Even if this data exists, most of our businesses in the north, including Kano State, are not formal businesses, so their distributors are in Lagos and other Southern States. Our traders are running away from institutionalisation of corporate governance framework in their businesses that will give them the capacity to deal with manufacturers and wholesalers directly in order to properly document their dealerships. We are simply traders.
Lottery is worse, because majority of our states think the whole business is haram. But wait, is it not double standard that you are operating a secular state, collecting VAT revenue generated from breweries and royalties from casinos, including the lottery for all these years while still believing it's haram? At least, it would soon be over, and we shall stick with halal revenues.
Cut long story short, the North must wake up on issues of governance and development. The culture of electing clueless Governors, the dominance of corrupt and soulless political class must end. We must pay more attention to our man power and skills development policies, reform our education systems, because that's what all these boil down to. EDUCATION!
Early this year, the Supreme Court, in a suit filed by the Federal Government, scrapped the States and Local Government joint account which before then entrusted local government funds in the hands of their respective States.
In another case, the Supreme Court also agreed with the argument of the AGF and held that NNPC's stake (shareholding) in the NLNG, unlike the NNPC itself, actually belongs to the Federal Government alone and not the entire Federation. Those billions of dollars accrued to NNPC from NLNG annually are not to be shared anymore with the States as part of FAAC.
Similarly VAT, a chunk part of the non-oil revenue, currently being shared based on equity, derivation and population formula amongst FG, States and Local Government will, if the Emilokan's Executive Bill succeeds at the National Assembly, now be shared based on derivation or consumption or both. Either way, I don't see how the north can benefit from it. I will get to the reason shortly.
Then came today, another blow in a Suit initiated by Lagos State Government, the Learned Justices of the Supreme Court while granting all the reliefs sought by the AG of Lagos State held that revenues accrued to the Federation through the National Lottery Commission from the regulation and royalties of lottery and other online games is in reality within the Residual Legislative List, exclusive to States to regulate and generate revenues from.
I believe there may be more of these seemingly harsh interpretations of the law in the nearest future. Because that is what the Constitution actually contemplated.
If you put these chain of events together, you would only come to one conclusion: that full federalism is taking a crude shape in the country, against the wish of everyone. Had we, northerners, been thoughtful and proactive, we would have prepared for this time. We would have confronted the issue of restructuring with strategy rather than our usual rejectionist attitude, to achieve it on our terms and put a timeline for gradual implementation in order to minimise it's impact. With our sell-out NASS members, who either do not appreciate where all this is headed or they have been bought to look away, it's only a matter of time. Allah ya ji kan Senator Suke Yaro Gandi and the rest of his contemporary visionaries and patriots.
What should we expect now? Our FAAC reliant States will receive shorter allocation. If VAT is to be shared based on derivation, then most of the Corporate Headquarters of businesses where the remittance of VAT takes place are far away from the north. What if it's to be shared based on consumption? The follow up question is: how do you determine the end users when you don't have the data to prove where it is consumed? Even if this data exists, most of our businesses in the north, including Kano State, are not formal businesses, so their distributors are in Lagos and other Southern States. Our traders are running away from institutionalisation of corporate governance framework in their businesses that will give them the capacity to deal with manufacturers and wholesalers directly in order to properly document their dealerships. We are simply traders.
Lottery is worse, because majority of our states think the whole business is haram. But wait, is it not double standard that you are operating a secular state, collecting VAT revenue generated from breweries and royalties from casinos, including the lottery for all these years while still believing it's haram? At least, it would soon be over, and we shall stick with halal revenues.
Cut long story short, the North must wake up on issues of governance and development. The culture of electing clueless Governors, the dominance of corrupt and soulless political class must end. We must pay more attention to our man power and skills development policies, reform our education systems, because that's what all these boil down to. EDUCATION!
Our youth must stop social media praise-singing and political psycophancy and embrace education and skill acquisition. Our businesses must also adopt corporate governance, Innovation and be more industrious and forward thinking''.
By Shettima Dan'Azumi
By Shettima Dan'Azumi
What a good read.....
ReplyDeleteNow you know why these northern senators and elites were kicking against the bills. Like I said few days or week back, Mr President no send anybody papa. In this government, he can't be caged or frustrated by the north.
The north that has held unto power for so many decades yet can't boost of development in the region.
Today, they're crying cos allocations will be disbursed according to merit. These are regions that has held the country backward for two long and wants to continue in that trajectory.
Mr President isn't my man and favourite but I must give him accolade for some of the bills the executive are pushing through the legislators.
After this tax bill, I look forward on restructuring through regional government as the Senate President once opined.
This is going to be a good ride.
© TEEJAY
Teejay,
DeleteI will praise you for openly accepting that the president knows what he is doing and most importantly for having the balls to do it.
Good to know
ReplyDeleteTruth be told. Since independence, in Nigeria, it has been robbing peter to pay Paul. Northern Nigeria needs to face reality. It won't be the same again
ReplyDeleteU forgot to go back to history, before the discovery of crude in nigeria, what was the country surviving on? Go find out the the bulk of the producers of those things the country was surviving on. Then we wud have this discussion. Don’t talk as if the North was never ever productive.
DeleteInteresting read... Knowledge is power 💪
ReplyDeleteI'm beginning to like this president o.
ReplyDeleteThe man is stepping on many strong toes that previous Presidents could not dare. He's fixing things from its root cause.
If only he could consider the poor masses in some of his decisions making and make life a bit easier for them by reducing the fuel pump prices, so that food stuff, transportations and businesses could thrive.🧐🧐😎
Apple.........,
DeleteHe CAN'T reduce the cost of fuel just by instruction. Unfortunately, I don't have the energy and time to educate you on how prices are reached.
Please ask Google. Thank you.
The north should not see this as an disadvantage but rather a wake up call. Intact the north has so much potentials meaning they have mineral and human resources more than every region in the country. Most of the food we eat comes from there. The entire country can go hungry without them
ReplyDeleteAll the north needs is to solve the security challenges bothering them. They should understand that the region cannot progress with crisis,etc.
They even have stronger potential to generate more revenue than the other regions in Nigeria
Good 👍
ReplyDeleteInteresting to read
This is enlightening
ReplyDeleteHighly informative.
ReplyDelete