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VAT: Ebonyi, 30 other states will become unviable – Umahi

Governor David Umahi of Ebonyi State has said that the agitation by some state governments in Nigeria to collect Value Added Tax (VAT) directly would affect the fortunes of his state and those of 30 others and makes them unviable, adding that it would further impoverish weak states in the country. Umahi also carpeted a former minister of aviation, Mr. Femi Fani-Kayode, who defected from the Peoples Democratic Party (PDP) to the All Progressives Congress (APC) on Thursday, and claimed to have been instrumental to the defection of Umahi and two other governors to the ruling party.

The Governor, who stated these as a guest on Channels Television’s Sunrise Daily on Friday, threw his weight behind the call for the zoning of the presidency to the Southern part of Nigeria in 2023 as being demanded by governors of the Southern states of the country. It will be recalled that Southern Governors’ Forum, on Thursday, expressed its support for states to collect the Value Added Tax (VAT) as part of the resolutions reached in their meeting held in Enugu State. There had been controversy over the collection of VAT after a Federal High Court ruled that it was not the duty of the Federal Government to collect it.

The tax has been collected by the FG since the military era, although the money is shared by the three tiers of government. Following the court ruling, Lagos and Rivers states passed laws that allowed them to collect VAT in their states. The Federal Inland Revenue Services (FIRS), which used to collect the VAT on behalf of the Federal Government, has, however, challenged the court ruling at the appellate court. The Forum also reiterated its earlier position that the next President must come from the Southern part of Nigeria, in line with the politics of equity, justice and fairness.

Umahi said: “Ebonyi State and more than 30 other states in Nigeria would not be viable if states should collect VAT directly. We should think about the nation first. Let us tarry a while and see how we can cross the river and then we can now come to talk about who is right and who is wrong. “It’s quite challenging and difficult.

The economy of Ebonyi State is not developed. It is not that we are not trying to put up solid infrastructure as we have a state university with infrastructure, our international airport, the first of its kind, the biggest mall in Africa, the biggest market and we are opening up the roads that are important to the development of the economy.

“But are the people really developing agriculture using hoes and cutlasses? We have put over N12bn on agriculture as loans and people took it as a kind of empowerment from the government. What do you do, you go to court, no. The economy of the weaker states should be developed and don’t tell me that if we cannot compete we should merge, merge with who?” “When you now say that let every state collects its VAT,am going to lose over 40% of my resources and that can lead to a very serious matter. People argue that we should look inwards, look inwards where? We are running a monolithic economy, everything is about the government. “So if you want us to look inwards, you have to look for resources to develop so that we can have comparative advantage.

That is my position,” he said. The Governor insisted that if each state should collect its VAT, a number of states would collapse, and that the Revenue Mobilisation Allocation and Fiscal Commission’s (RMFAC) law does not believe that every state should eat and have surplus while some other states do not have what to eat.

“We have to be our brother’s keeper, we have to see how we can grow the economy of the weakest states otherwise we will have a lot of insecurity in those states. “Nation comes first, so do you want to do something and the entire nation would destabilise? Even if you have all the money in the world, you would not be able to spend it. So it is very important, even in the revenue sharing formula, we have the same kind of parameter, where some weak states are helped. This is very important.” Umahi, who said that Fani-Kayode was his good friend, demanded that he should withdraw a statement credited to him on Thursday that he influenced his, (Umahi’s) defection to the APC, and that “it was “an insult on my person and other governors.” “The man did now rulknow when I moved, incidentally, he visited me at that time and he said he was going to join me and other governors to declare.

“How would somebody in the PDP be instrumental to my moving, a whole Governor of a state, an experienced governor for that matter? He has to withdraw that statement; he was never part of any discussion about my movement. “I moved the South East to the centre of administration to close the gap between the centre and the South East, which our forefathers like the late Dr. Nnamdi Azikiwe fought for.

“For somebody to come and say that he was instrumental to the movement of a whole chairman of South East Governors is an insult on my person. With all due respect, he has to withdraw that statement. He remains my friend and a good one for that matter. But he played no role in my movement and I am sure he played no role in the movement of others too,” he said. While not disagreeing with other Southern governors that the presidency should be zoned to the South in 2023, the Governor said that the problem the nation was facing was not just security challenges, but economic challenges, which he said was not peculiar to Nigeria, but that it is global. He said that as a child of God and somebody who believed that power belongs to God, he would rely on God in terms of where the presidency would come from and who would become the president, and that “we have prayed to God and God would listen to us.”

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