PGF chief: Why VAT collection has become attractive to states

The Director-General of the All Progressives Congress (APC) Progressive Governors Forum (PGF), Salihu Moh Lukman, has chided the People’s Democratic Party (PDP) and Ebun-olu Adegboruwa SAN, for reducing to politics and legality, the issues raised by President Muhammadu Buhari, on measure to tackle the spread of Coronavirus pandemic.

The director-general of the Progressive Governors Forum, Salihu Mohammed Lukman, says that credit must be given to the All Progressives Congress-led federal government of President Buhari for the remarkable improvement in VAT collection in the country, “such that today, it has become an attractive variable in the struggle for resource control by state governments.”

Lukman said the significant increase in VAT in the country between 2015 and 2020 confirmed improved efficiency and reduced corruption in the process of collection and management of Nigeria’s public finances.

In an opinion article entitled ‘Retrogressive Politics of Value Added Tax in Nigeria’, Lukman said it was not by accident that VAT collection in the country had significantly increased under the APC led federal government.

“This is because one of the specific commitments of APC since 2015 as outlined in the section of the party’s manifesto ‘Funding a New Nigeria’ was that ‘APC government will set about the urgent task of getting Nigeria’s public finances in order, by tackling the massive waste, duplication and corruption in the system, diversifying the economy and expanding our tax base to increase non-oil revenues, and reprioritising public spending away from bureaucracy towards investment in infrastructure and improved frontline services.’

Both in terms of ‘getting Nigeria’s public finances in order’ and ‘investment in infrastructure’, the PGF DG said the APC-led federal government is implementing provisions of the APC manifesto to the letter, and the result has also been the expansion in the nation’s tax base to increase non-oil revenue.

He, however, chided Governor Nyesom Wike of Rivers State, who he noted had been “audaciously and shamelessly” talking about VAT today because its value has significantly increased “which made it attractive for a rich state like Rivers to be interested in controlling it.”

He said: “If Governor Wike has any morality, he should look back and acknowledge how small Rivers must have received as its VAT share before 2015.

“Being a leading member of the Peoples Democratic Party, what was responsible for the low VAT records in the country between 1999 and 2015? And since, according to him and almost every leader of PDP, Nigerians are looking up to the PDP to rescue the nation from ‘bad governance’ in the hands of APC, does PDP’s brand of good governance come with low capacity to manage the nation’s public finances?”

Lukman said as members of APC, it is important that Governor Wike is reminded that the current increased record of VAT collection in the country is made possible only because the PDP is no longer in power.

“If PDP were to be in power, the fact of inefficiency and corruption in the process of collection and management of VAT would have continued and the amount collected would have remained relatively low,” he said.

Lukman, however, noted that if the government wants to ensure increased production of goods and services, increasing the amount of money available to low-income groups is an attraction.

Therefore, he said, any government that wants to be popular with citizens would lean towards progressive tax policy.

He said Nigerian democracy and politics must rise above sentiments.

According to him, instead of debating how to consume the little resources so far available, Nigerian political leaders should be debating how to increase available resources.

He also said that APC leaders must take advantage of the current VAT debate to take ownership of (the party’s) achievements, “which the fact of improved VAT collections in the country represents.”

“Commitment to develop capacity to mobilise large scale financial resources to develop productive potentials of all Nigerian states should be the minimum requirement for all APC leaders,” he noted.

He said there is a need to develop Nigerian democracy so that political parties in the country can initiate pro-people and pro-poor public policies.

As important as the debate around increased access to resources by state governments, he said, “so long as political leaders are not committed to initiatives that can develop the productive capacity of the country, the amount of revenue generated will remain low.”

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