KADUNA — The Northern Governors Forum (NGF) has said the collection of value-added tax (VAT) by states will result in inflation in the prices of goods and services.
The forum asserted that such a move will also create interstate trade barriers.
This resolution was at a meeting with northern state emirs and chiefs in Kaduna on Monday.
“VAT is being confused by these State Government as a sales tax.
“If every State enacted its own VAT Law, multiple taxations will result in increases of prices of goods and services and collapse in interstate trade.
“VAT is not a production tax like excise, but terminal tax which is paid by the ultimate consumer.
“The reason Lagos account for our 50% Vat collection is because most of the telecommunication companies, Banks, manufacturing and other trading activities have their headquarters in Lagos with the resultant and wrongful attribution of VAT.
“Until and unless the Supreme Court pronounces judgement on the substantive matter between Rivers State and Federal Government, the matter is sub judice, and the Northern States Governors Forum would respect this,” the forum said.
The Federal Inland Revenue Service (FIRS) has been in a legal tussle with Rivers and Lagos state governments over VAT collection in the past few weeks.
In August, a federal high court in Port Harcourt restrained the FIRS from collecting VAT and personal income tax (PIT) in Rivers state.
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