VAT Bill When Passed Into Law Will Benefit Lagos, Says Lawmakers



Lagos State House of Assembly has said the state stands to benefit in the State’s Value Added Tax (VAT) Bill as the state would address the revenue percentage to develop schools, hospitals and infrastructures.

The House made this assertion through the Speaker of the House,  Rt. (Hon) Mudashiru Ajayi Obasa, who noted that the focus of the bill should not be on the sharing formula which is stated in the bill, 75% to the State Government and 25% to the Local Government to be shared on the basis of derivation, but on the opportunity to practice constitutional democracy in the State.

Lawmakers during the Plenary on Monday, took turns to debate on “A Bill for Law to impose and charge Value Added Tax on creating goods and services, provided for the administration of the tax and for related matters” as it scales through second reading.

Deputy Majority Leader, Hon. Noheem Adams, stated that VAT was introduced as far back as 1954 in France before it spread global to developed countries in the world, adding “VAT is an indirect tax levied on expenditure that is been paid by a final consumers on goods and services, was introduced in Nigeria in 1993 by the Value Added Tax Act of 1993. In 1994, Nigeria started full operation of the Value Added Tax of 1993 which Nigeria generated ₦8.189Billion Naira, and in 1995, Nigeria generated ₦21Billion Naira. The Central Bank of Nigeria reports of 2015 shows that a total of ₦0.97 trillion was generated in the first six months of 2015.”

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He stated “According to the National Bureau of Statistics, in 2019, Nigeria will generate a total sum of ₦1.18Billion that was remitted to the federal account. In 2020, ₦1.5 Billion was generated while Lagos State alone contributed 55%. If Lagos State could generate up to 55% then the allocation given to the State by the Federal Government is meager.”

Speaking to the Bill, Hon. Richard Kasunmu noted that if passed expediently, the bill will create more employment opportunities and increase more revenue to the State, as section 16(2) prohibit an importer of taxable goods to pay for the service on the goods before clearing, putting the responsibility of customs in relation to import duties, remit transfers, into consideration.

Lending his voice, Hon. Nurudeen Saka-Solaja mentioned that the Federal Government needs to increase the State’s revenue in order to build infrastructural development in the State as 90% of value added tax is generated from Lagos State Government because VAT is collected at every production stage.

In addition, Hon. Gbolahan Yishawu explained that the VAT Act which used to be a 1993 decree has all the ailment of a decree and Section 315 of the 1999 Constitution of the Federal Republic of Nigeria as amended, states that those decrees must be brought into conformity of the democratic constitution and this has not been done.

He added that Lagos has invested in the society but needs to improve more on infrastructures to boost the State’s economy.

The Speaker thereafter, committed the Bill to the House Committee on Finance to report its findings on Thursday.

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