The Chairman of the Northern Governors Forum and Governor of Plateau State, Simon Lalong, says the issue of the collection of Value added Tax by states was before the court.
He said it would amount to subjuduice to take a decision on the matter.
Lalong insisted that it was the view of his colleagues that until there is pronouncement by the Supreme Court on the substantive matter between Rivers and the Federal Inland Revenue Service, “the matter is subjudice and Northern States Governors’ Forum would respect this.”
“The Northern State Governors’ Forum considered the ongoing national debate on the collection of Value Added Tax. As responsible leaders while we are constraint by the fact that the matter is sub-judice, we however for the purposes of educating the public make the following observations:
“The judgment of the Federal high Court calls to question the constitutionality of VAT, withholding tax, education tax, Niger Delta Development Commission, National Information Technology Development Agency, 13% derivation, National Economic Development Council and many other currently levied and collected by the Federal Government of Nigeria, Federal Inlands Revenue Service.
“Rivers and Lagos state governments have enacted their own VAT laws and the Southern Governors’ Forum has expressed support for this course of action;
“VAT is being confused by these state governments as a sales tax. If every state enacts its own VAT law, multiple taxation will result in increase in prices of goods and services and collapse in interstate trade. VAT is not a production tax like excise, but terminal tax which is paid by the ultimate consumer;
“Another confusion is ignoring observation above and its “overall effect”. The reason Lagos accounts for our 50 per cent VAT collection is because most of the telecommunication companies, banks, manufacturing and other trading activities have their headquarters in Lagos with the resultant and wrongful attribution of VAT
“Until and unless the Supreme Court pronounces judgment on the substantive matter between Rivers State and Federal Government, the matter is sub-judice and Northern Governors’ Forum would respect this.