Lagos VAT bill: LGAs seek 50: 50 sharing formula with state govt

Wednesday, September 8, 2021 10:56 pm

Lagos House of Assembly

By Adekunle Williams

The Conference of 57 Local Governments and Local Council Development Areas (LCDAs) in Lagos State has requested for equal sharing formula with the state in the proposed Value Added Tax (VAT) bill now before the state House of Assembly.

The Secretary of the Conference 57 and Chairman of Odi-Olowo/Ojuwoye LCDA, Abdulrasak Ajala, made the request at a one-day public hearing on the bill organised by the Lagos Assembly on Wednesday.

The News Agency of Nigeria (NAN) reports that the title of the bill is “A Bill for a Law to impose and charge Value Added Tax (VAT) on certain foods and services, provided for the administration of the tax and for related matters”.

Ajala explained that for the councils to pursue meaningful development, they required a better sharing formula for its members in the proposed VAT law.

The conference 57 secretary said they were requesting for a 50-50 sharing formula, contrary to the 75-25 proposed in the bill in favour of the state government.

Being the closest to the grassroots, Ajala explained that the councils, who also host the companies, should benefit from a better share than the 25 per cent in the bill.

The council chairman commended the 9th Assembly for the bill, as well as the synergy between the Executive and the Legislature.

“On the distribution of revenue, you will agree with me, Value Added Tax is on consumption and production, and all these economic activities are domiciled in our respective communities.

“In addition, local governments, being the closest to the grassroots, need more revenues given the enormity of the responsibilities the Constitution confers on us.

“Hence, the 25 per cent in the bill is grossly inadequate for local governments to execute all the promises we made to our people; and of course all our electoral promises.

“This is the reason we are making a passionate appeal, on behalf of Conference 57, that we should raise the bar higher, from 25 per cent to 50 per cent,” Ajala said.

Contributing, Mr Michael Ade, representing the Lagos Tax Justice and Governance, commended the Lagos Assembly and the state government for having the political will at a time like this.

Also commenting, the state’s Attorney-General and Commissioner for Justice, Moyosere Onigbanjo (SAN), declared that the judgement on the VAT law was not valid only in Rivers state, but any state in the country stood to benefit from the judgment.

Onigbanjo noted that the National Assembly does not have powers on VAT, which was what brought them to where they were today.

Earlier, the Chairman, House Committee on Finance, Rotimi Olowo, insisted that it would make no sense if all monies accruable to Lagos state was taken by the Federal Government.

Olowo argued that given the pressures on the state governments in terms of infrastructure development, the proposed law on VAT in the state would bring about holistic development of the state.

In his address of welcome, the Speaker of the Assembly, Dr Mudashiru Obasa, assured stakeholders at the public hearing that their contribution were as vital as the bill and would be included in the proposed bill before its passage.

Obasa, represented by the Deputy Speaker, AbdulWasiu Eshilokun noted that their contributions would be looked into so they could come up with an all inclusive VAT law for the state.