By Tunde Abatan, 08165660217.
e mail: tunde2013abatan@gmail.com
Governor Nyesome Wike of Rivers State means different thing to different people.
To some, he may be a noise maker, busy body and one always striving for national attention or used to frivolities.
But one thing everybody seems to have agreed on is that since his state got the Federal High Court Ruling on August 9 making the collection of Value added Tax,VAT,the duty of the states to collect obviously based on their productivity to the states local economy, he has changed the discussion on the economic landscape of the nation’s future. He has brought into fore again, the age -long battle for economic independence by the various states, which makes up the Nigerian federation.
In other words, the ruling also shows to a great extent that Nigeria’s latent crisis is more of economy than political . This is because recent events have shown that political exigencies shape the economy and the state.
By that judgement, which was again upheld by the Federal High Court in Port hartcourt having on September 6 refused to give an order for a stay of execution as demanded by the Federal Inland Revenue Service,FIRS, he has pushed further the ability of the nations legal minds to test and put to question, Nigeria’s beggarly federalism.
Lagos/Rivers govs: sanwo-Olu and Wike
This attitude has over the years made states, which produced nothing to stop,at least for a while the monthly trip to Abuja to collect money from where they did not sow.
The decision of Governor Wike to approach the court to determine who collects and dispense VAT is also a fundamental decision to question and reorder the legitimacy of Lord Frederick Luggard prior to 1914, to suggest to the Colonial office to merge the prosperous and viable Southern Protectorate and less viable Northern protectorate together in January 1914 to form a single colony.
This decision as events unfold later,is in order to reduce and later remove British government use of its resources to manage it’s colonies and in particular Nigeria’s Northern protectorate.
The protectorate by them was being managed by subventions from the Home office.It was not a viable economic entity (so it has remained till date). It is unlike the South, which has enough resources to run its affairs without recourse to the Home office in London.
In order words, Wike’s victory at the High Court on who collects and share VAT proceeds is a judicial way of addressing Nigeria’s age-long problem of fiscal federalism which was aborted after the military took over governance in 1966. The military’s introduction of Unitary system removed in one fell swoop the fiscal arrangement which made the then four regions to donate only 50percent of their resources to the central government. It is the other way round now where the central government simply cornered the resources and became a father xmas on an economy, which it neither develop nor grow.
The High court judgement on the collection and disbursement of VAT has thus opened a new vista for agitators of Restructuring of the country who have been in the trenches advocating for a return to what the military stopped in 1966 but with little progress as the federal government rather than shedding it’s powers added more to the Exclusive list with it’s socio economic consequences on the country.
Furthermore,the Wike induced victory has become a tonic for other viable and forwarding looking states in the country to begin to enjoy their sweat and not arm- twisted as the FIRS has been doing, to donate their sweat to indolent and lazy states who have been reaping where they did not show.
Besides,the ruling is also a tonic for other states to test the law and the defective 1999 constitution as it affects their health in the natíon and it’s fledgling democracy.
The judgement is in deed the second of such since 2006 when the then Lagos state government under Asiwaju Bola Ahmed Tinubu, tested the law as to the seizure of it’s funds as a result of creation of 37 local council development areas, LCDA, by the then President Olusegun Obasanjo’s government.
After many years in the court, Lagos State won and democracy, injustice and impunity was put to test but reason prevailed.
The Federal High Court ruling is also a clear signal that what is needed by the 30 states who are threatened by the threat to their free monthly donations from the federation account is a Thinking cap.
Yes, the far reaching implication is a significant reduction in the N1.53 trillion naira VAT which itself accounted for N4.95 trillion tax being collected by the FIRS.
Out of this, N763 billion represents local VAT which represents 49.8percent of the total taxes projection.
The essence here is that the former figure being cornered by the FIRS is a revenue earned through injustice done on the hardworking citizens in those southern states who toiled day and night . What it means is that the people in the Southern states have been working round the clock to subsidize and provide for the lazy life style of those Northern and southern states.
They have with the passage of time, come to accept free donation as a way of life.
The losers in this new VAT war are the 30 states that cumulatively generate less than 20 percent of Nigeria’s VAT.
It means in essence that Lagos,Rivers, Delta,Ogun,Oyo and Adamawa accounts for 80percent of the N763billion local tax generated by all the 36 states in the country put together.
Lagos alone generate about 55percent of the local VAT in the country.
In essence,the new way of VAT collection is an inducement to hard work , hard thinking and enterprise while it is also a red card for indolence and laziness.
The decision by Lagos and Rivers states to collect the local VAT which account for a significant percentage of the national local tax is a wake up call on other states to put on the thinking cap.
The ruling is also coming up at a time when the central government- with it’s natural penchant for religious and political bigotry, is an economic arrow on its veins as without adequate fund, it couldn’t execute it’s projects. The citing of the projects, to all and sundry are lopsided while the helmsmen driving them are selected based on ethnic and religious consideration.
Indeed, Governor Wike’s admonition to the states practicing Sharia but using proceeds gotten from sale of alcohol is a poke in their nose for being hypocritical. Hear him,”You can’t destroy beer in your state in the name of Sharia,yet share from VAT on beer produced and consumed by other states.It is hypocrisy. Free money has promoted laziness in the North.If you want to be governor,grow your states economy”.
Wike did not stop at that,he queried the logic in the Northern states that, “contribute humongous numbers during elections that can’t translate to tax earning for your state.if they can vote,they should be able to work.” Ironically,for Nigeria’s Northern states and her ruling elite, votes procured through indecent means using underage,under-fed and under- privileged youths to get power are also consequently used to enslave the Southern states which provide the economic lifeline for Nigeria as it has been since 1914.
Wike also query the injustice of VAT collection and distribution by FIRS.
Said he,”In June N15.1billion was collected as taxes in Rivers state but N4.7billion was given to Rivers state, N46.4b was collected from Lagos state but Lagos was given N9.3bn.Kano generated N2.8bn and was given N2.8 bn”. What a feeding bottle economy?
That Lagos state house of assembly which ignited the war on local government creation jumped into the fray and under four weeks passed its own VAT Tax Bill with Speaker Mudasiru Obasa giving a matching order to Assembly Clerk,Olalekan Onafeko to immediately transmit a clean copy to Governor Sanwoolu for assent shows a determination.
The alacrity with which Lagos passed its own anti VAT law was instructive and a serious warning to the Northern and other parasitic states to be ready for ‘economic’ war.
Perhaps, anticipating a loss at the court, the FIRS,which top echelon is peopled largely by Northerners, had in July 1,2021, fired a letter with reference FIRS/EC/CWREP/0416/21/037 to the National Assembly asking it to amend the nations constitution to empower the federal government only with the collection of VAT with it’s inclusion in the Exclusive Legislative list.
Besides, the FIRS in the letter, also wanted the NASS to approve the establishment of a Federal Revenue Court of Nigeria.
This obviously is to perpetuate it’s regime of inequity in it’s tax disbursement.
For a country that is reeling under the obnoxious 1999 constitution and the over centralization of powers at the centre, to contemplate such constitutional amendment speaks volume of the mindset of those in the corridors of power.
This attitude also portrays their unwillingness to accept the reality of urgent need to devolve power for the country to survive it’s trying times .
Is the North thinking that power will always reside with it such that it could use the privilege of controlling the nations finances to muscle the South?
Is the FIRS and it’s board watching the body language of President Muhammadu Buhari on who takes over from him.?
If by error of commission, power shifts to the South in 2023, will the North be comfortable with the awesome powers it has conferred on a Southern president given the clanishness and provincialism displayed by President Buhari throughout his tenure?
A war fought on any front is for survival be they political or economic.
For the former,it may be to maintain its overlorship while for the later to attain it’s economic independence.
But in both cases, the oppressors won’t give up easily. If it can’t have it’s way by Reason it would resort to stirring up emotions and sentiments.
That is exactly what Gombe state did Tuesday September 7 when it’s Finance and economic Creation commissioner, Muhammad Magaji,appealed to Southern states to reconsider it’s decision to keep VAT.
He asked Southern states to set aside emotions and ‘be their brother’s keeper”.
Now,it is curious and strange that the North regard the South as it’s brother’s keeper?,
Has Magaji asked President Buhari to have same mind in running Nigeria’s state since he came to power?
To say that he is a surreptitious native imperialist is an understatement.
Is it now that the South is poised to demonstrating its economic power that the North suddenly realize that the South is the economic soul of the country?
With the decision of the Court of Appeal,Friday September 10,2021, in Abuja to ask the states not to implement the Federal High Court ruling, the stage is set for a battle at the appellate court which to a very large extent will draw interest not only from the Bar and Bench but also from the ruling elite and especially the Southern parts of the country.
This is considering the economic implications amid the age- long battle for fiscal federalism that has been on the front burner in the country for some time now.
For the six states in the country that are relatively safer with the new VAT regime, it is a titanic battle to keep the fundamental victory won at the Federal Court.
This is in view of the obvious fact that the Buhari regime is against fiscal federalism and even bent on taking more powers from the state to the centre in an apparent disregard for the realities in the country.
The unfolding events in the next couple of months when the South will battle at the Nations court and in the court of public opinion to retain it’s victory will be interesting and challenging for the judiciary.
The determination of the southern states to wield its economic power and assert it’s right to fair, just and equitable treatment in a nation they’ve sustained in the past 61 years, will determine the shape of things to come prelude to 2023.
You can fool some people all the time, definitely not all the people all the time.
The chicken has definitely come home to roost!
