Chairman of Ogun State Internal Revenue Service (OGIRS), Adekunle Adeosun, has disagreed with the statement credited to the Federal Government that 55 percent of yearly Value Added Tax (VAT) receipt comes from Lagos State, the balance of 45 percent comes from remaining 35 states of the federation and Abuja.
Adeosun says the statement would be true if the source/state of reporting VAT is the criterion as supposed to the source/state where the VAT revenue comes from.
It would be recalled that Kemi Adeosun, minister of finance, had on Tuesday last week at the meeting with members of the Progressive Governors’ Forum held in Birnin Kebbi, Kebbi State, said 55 percent of the total VAT receipts come from Lagos and the remaining 45 percent was being shared among 35 states and Abuja.
Responding against the statement at the Tax Campaign held in Ayetoro, Imeko-Afon, Ilara, all in Ogun West Senatorial district recently, the chairman of Ogun revenue board expressed doubts over the figures, saying that in as much as it was nationally recognised that most manufacturing industries were domiciled in Ogun State, it was not possible that any Nigerian state, including Lagos, should be recognised for earning 55 percent of the total VAT ahead of Ogun.
He said, “Ogun State is definitely being short-changed because the data on VAT is based on the states they are reported from and not the states that generate the revenue on which VAT and WHT are calculated.
“Take for example, Nestle’s Head Office is in Lagos, when they remit their tax, they will remit it from Lagos, whereas they have operations in Ogun state.
“Also, take for example, Lafarge, Lafarge Head Office is in Lagos, where do they generate the bulk of income from? Ogun State, so, when they remit their VAT, they will say it’s from Lagos state, that is something that Ogun State will need to work on to get its rightful recognition in the way they (FG) calculate and give recognition to VAT and WHT.
“Take Nigerian Breweries for example too. Nigerian Breweries has three operations in Ogun State, yet when they remit their VAT, the VAT is reported from their Head Office in Lagos State.
“So, Ogun State is not given adequate and equitable recognition when it comes to VAT and WHT because these companies remit their VAT from Head Offices, whereas, they generate most of the income in Ogun state.
“So, what the minister is talking about on 55% VAT from Lagos, I believe, she is talking from the point of remitting not the talking from the point of where those revenues are generated or sources of ‘VATable’ items, most of the ‘VATable’ items are from Ogun State. Lafarge, Dangote, Unilever, Nestle, Nigerian Breweries and a host of other companies are examples of such.”
