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Analysis: The Unfair VAT Benefit by Sharia States

There has been a lot of restrained sentiment in the past about Sharia states in Northern Nigeria benefiting from the portions of Value Added Tax (VAT) which they did not contribute towards. 

It is public knowledge now that Sharia states which include Zamfara, Kano, Sokoto, Katsina, Bauchi, Borno, Jigawa, Kebbi, Yobe, Kaduna, Niger, Gombe, have sharia-based laws which strictly prohibit the sale and consumption of alcohol of any kind. One of the major sources of VAT being alcohol remains illegal and banned from being sold in these states. 

Now with the revelation that the North East Development Commission (NEDC) currently being probed enjoys 3% of the VAT generated nationwide, the inequality in our nationhood is further highlighted. 


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Arguments Against VAT Benefit By The Sharia States:

When the idea of the North-East Development Commission (NEDC) was being mulled, many Nigerians did not foresee the zeal by some politicians of using hard-earned VAT to fund it. It was only largely criticised as a white elephant agency fashioned after the Niger Delta Development Commission (NDDC). Mulling NEDC as an agency seemed premature and putting the cart before the horse.

One of the arguments against the commission then was that the crisis in the North-East is yet to abate, let alone start rebuilding the Boko-Haram damaged region. Many also feared that it would be used as a route to funnel funds from an already fund-starved country. 

On October 20, 2016, the Senate silently passed the NEDC bill

But even more scandalous was the cunning insertion in the (NEDC) Act which made provision for a whopping 3% of the VAT revenue to be deducted from VAT revenue to fund the agency. A clause in the NEDC Act reportedly also made it impossible to change the funding source from the 3% VAT for at least 10 years and is not mutable.

From the hallowed chambers of the Nigerian parliament, a lawmaker representing the Andoni/Opobo/Nkoro Federal Constituency of Rivers State in the House of Representatives, Awaji-Inombek Abiante, in an interview on August 30, echoed thoughts on the VAT benefit by the Sharia states. He said;

“Somebody else will sit down somewhere saying ‘I am very holy; I am a very holy man’ but also collects from that (tax) which the unholy man has paid. How justifiable is that?”

And going by the pockets of recent discussions on the VAT subject, it is evident that many Nigerians share Awaji-Inombek Abiante’s sentiment.

However, barely 3 years after President Muhammadu Buhari signed the NEDC bill into law, it was already caught up in scandals. On July 23rd, the House of Representatives resumed investigative proceedings on corruption at the NEDC alleged to be up to N100 billion.

While speaking at plenary, Hon. Ndidi Elumelu, who moved the probe motion said;

“The N100 billion so far disbursed to the commission by the federal government is said to have vanished under a year without any visible impact on the refugees nor any infrastructural development credited to the name of the commission in the whole of the Northeast.”

Bottom line: If the laws governing some area of the country is not applicable to another part of the same country, the former area should not keep benefiting from a self-inflicted restricted. 


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Therefore, not only will most Nigerians call out the unfairness in Sharia states enjoying drips of the alcohol tax which they did not contribute to in VAT, many are also equally skeptical that the NEDC – for its humanitarian purpose – might begin to parallel the NDDC in corruption. 

The hypocritical nature of such political arrangement with respect to VAT tax being enjoyed by Northern Sharia states, and used for the NEDC, stands exposed. 

For there to be national cohesion and to avoid deep-seated problems such as the VAT matter, it is therefore essential to separate state from religion going forward.

Source:

Premium Times NG

Punch NG

Featured image source: World Watch Monitor


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Macaddy Gad

Macaddy is mostly a farmer in the day who also dabbles into technology at night, in search of other cutting edge intersections. He's on Twitter @i_fix_you

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