A member of the House of Representatives from Rivers State, Awaji-Inombek Abiante, says it is unfair for Northern States that prohibit consumption of beer and other alcoholic drinks to benefit from Value Added Tax (VAT) generated from the same products by other states.
Abiante, who represents Andoni/Opobo/Nkoro Federal Constituency, stated this in an interview with Sunday Punch while advocating for each state to retain 50 per cent of the revenue generated from all its resources.
The lawmaker had sponsored a bill to that effect but it was stepped down at the second reading stage in the House.
He said that the issue of resource control and fiscal federalism predated Nigeria’s independence, noting that the 1960 Independence Constitution backed each region’s right to keep 50 per cent of revenues from its resources after the founding fathers held extensive discussions.
Abiante noted that the military distorted the arrangement when it struck in 1966.
The lawmaker said that the 50 percent derivation should apply to every resource, including oil and gas, solid minerals and Value Added Tax (VAT).
Making a case for 50 percent derivation on VAT, Abiante said, “Let me tell you why that one is important. There are some people who go to club, they drink and they get ‘high’ (drunk). They pay VAT on the drinks. 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? You don’t do ‘owambe’ (party) but somebody is doing ‘owambe’ and you say ‘owambe’ is evil. So, allow those who suffer or who will suffer the hazards of the ‘owambe’ (to enjoy the VAT) because ‘owambe’ comes with its own hazards.
“People drink, get drunk, drive and have an accident. I don’t pray for that. People get into clubs and there is noise pollution which people suffer from. So, let them enjoy from them, including VAT.
“The pre-Independence arrangement indicated Pay-As-You-Earn; that one is for the states. (There is) no problem with that. However, every other resource should be 50 per cent; the state should also take it.
“The 50 per cent argument is not just for natural resources but also Value Added Tax, so that the man in Lagos who generates so much resource (for the government) from his activities will be able to have a return.
“For example, how many people from Apapa, Lagos are benefiting from the ports there? What are the hazards in Apapa? You cannot drive your car, there is traffic every day, you are suffering health challenges, yet you are not enjoying from what is (generated) there.
“How many of them have been made the managing director of the Nigerian Ports Authority? Members of the House of Representatives from Lagos State once proposed special status for the state in the 8th Assembly for being a former federal capital and generating the highest non-oil revenue for the country, but it met stiff opposition, especially from their colleagues from the North.
“Also, all the geopolitical zones now want development commissions after the establishment of the Niger Delta Development Commission and the North East Development Commission. Do these not confirm agitation over resources?”
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