The Insight
By Lateef Adewole
Email: lateefadewole23@gmail.com
Whatsapp: +2348179512401
In the last two weeks, “Wike” has been trending. Who is Wike? He is no other person than the Executive governor of Rivers state, Barr. Nyesom Wike. Why has he been trending? It’s for no other reason than his audacious step and action concerning the issue of tax collection in Nigeria, vis-a-vis the roles and responsibilities of the Federal government of Nigeria versus the states. What did he do then?
Sometimes ago, due all kinds of controversies that usually followed the collection of consumption taxes in various states by the Federal Government under the Value Added Tax (VAT) regime, the River state government went to court to challenge the status, where the federal government is responsible for collection of the VAT in each state, aggregate them into national purse before subsequently disbursing to the states. This arrangement has existed for so long while some states grumbled without any remedy.
Some states and many professionals have questioned why the federal government should be collecting taxes due to states? This has been in consonance with “feeding bottle” federal system we operate. The collection of proceeds from oil exploration are completely under the exclusive power of the Federal Government, being on the exclusive list but the case of VAT is not so.
But, like most things carried over from the years of military, where there was only one central government that wielded all the powers, our democracy has been fashioned after it. Afterall, Military handed us the current democracy and guided it’s evolution. What else could anyone have expected? Many things which are normally supposed to be under the purview of the federating units were highjacked by the Federal Government, just to feel more powerful and in control.
Most resources, powers and the rest, are controlled by the Federal Government. Only few items are left for the states, reason they go cap-in-hand on monthly basis “beg” for allocations from Abuja. This money actually came from various states through exploration of resources deposited in them in the first place. What an aberration! That was how VAT was cornered by FG as well, even when it’s not backed by the constitution. It’s not on the exclusive list.
Years ago, Lagos State, which remains the non-oil economic “cash cow” of Nigeria, has once challenged this arrangement in court, albeit unsuccessfully. Coincidentally and ironically, the legal team of Lagos at the time was led by the present Vice President Professor Yemi Osinbajo (SAN), while he was the Attorney General of Lagos State and Commissioner for Justice. The case was lost, not on its merit but on “technical” ground (the bane of getting justice in many cases in Nigeria).
So, it was a well received news when Justice Stephen Dalyop Pam of the Federal High Court, Port Harcourt, Rivers state, gave a judgement in favour of Rivers state. The judgement gave authority to Rivers state government to collect VAT within their state. This was highly celebrated. Additional orders were given which restrains the federal government, FIRS and their agents from further collecting the VAT. This sent shock waves throughout the land. It jolted the FGN.
Since the judgement was given the Federal Government, the Federal Inland Revenue Service (FIRS) and many state governments, who are realising the implications of it, have been running helter-skelter, looking for ways to thwart the judgement or overturn it or just anything to stop its implementation. There was even a plan to “smuggle” the VAT into exclusive list through the back door by surreptitiously amending the constitution to that effect. A letter to the Deputy Speaker of the House of Representatives was recently seen in circulation on social media, with regards to that.
The FIRS has appealed the judgement and asked for stay of execution. Justice Stephen Dalyop Pam rejected it. They lost at the Federal High Court again. However, a reprieve came thier way yesterday, when a three-man panel of the appellate court led by Justice Haruna Tsammani, granted their request for stay of execution and maintain of status quo ante. This didn’t go down well with the concerned states, which now include Lagos.
This Federal High Court judgement gave some states the push to start working to implement that judgement, by derivative, since it’s applicable to each state as individuals. Lagos did not waste time at all. A bill to that effect was sent to the State House of Assembly within the week, it was expeditiously attended to and passed. The Speaker, Rt. Honorable Mudasiru Obasa, directed the Acting Clerk of the house to send clean copies of the passed bill the the state executive governor, Babajide Sanwo-Olu, who also gave his assent to the bill yesterday. It is now a law in Lagos state.
Also, all the parties affected were asked to be notified of the new law afterwards, for appropriate readjustment in their tax remittances. Rivers state has done the same. Some other states are planning to do so too. However, there are many states who are more concerned about stopping this than looking inward and restrategising on how they need to adjust and boost their own IGR? Some governors have even resorted to “begging” their southern counterparts to “be their brother’s keeper”. Interesting.
That is the level of laziness that the misnomal federal system we operate has sank. Many political authorities don’t want to stress themselves anymore. They have become complacent and indolent due to “freebies” they collect from FAAC in Abuja, even when they contribute abysmally low amont to the purse. While some states exerted themselves to provide enabling environment for businesses and commercial entreprises to strive, many cared less. Some others even stiffen businesses by their obnoxious policies. Yet, same state governments want to benefit from the labour and sweat of others, in a case of “monkey dey work, baboon dey chop”. What irresponsibility! That should be unacceptable.
In the past few years, I have written about restructuring, resource control, taxation and the likes. My position remains that, Nigeria is not working as presently constituted. It’s unwieldy. The country has been sailing like a rudderless ship. We can’t and shouldn’t continue like this. But against all reasons, despite ceaseless clamour by sections of the country, the powers-that-be, who are benefiting from the anomalies, have paid deaf ears to it.
They have remained stubbornly adamant against it for their selfish interests or that of their groups. It has been an ill wind that blows no one any good. Nigeria has remained in motion without movement, roving in a circle. I have criticised the existing militrocracy or pseudo-federalism we run and advocated for a change in structure because, I believe it will engender growth of different regions through healthy competition among themselves. I wrote copiusly about this in my article titled: “Who is Afraid of Restructuring?”. I wouldn’t want to start all over here.
Caveat. I have not said restructuring is a magic wand that will make all the present problems bedevilling Nigeria to disappear in one fell swoop. No! What I believe is that, it will be a step in the right direction towards emancipation of the country and attaining greater strides. I have said it unequivocally many times that, warts and all, the best time in the history of Nigeria was when we ran a parliamentary system of government from 1951 to 1966, before the unfortunate interregnum. Or why do we still referred to that time as “golden era” of Nigeria?
Historically, many monumental and foundational developments were achieved during that period. Isn’t it a shame that after over six decades, that past is still casting a shadow on our present? How could we still be nostalgic and fantasise about such a long time in the past? Aren’t subsequent developments supposed to have dwarfed them and cast them into oblivion?
The pride of the Yorubas of the present South-West Nigeria is always the “Awolowo era”. The man left the position as premier of Western region 62 years ago. He died 34 years ago. Yet, no one has surpassed his achievements, despite the humongous resources that have accrued to the region in many subsequent decades. It’s a shame. Likewise in other regions in Nigeria.
I was also critical of the (mis)management of resources at the state levels by the governors. What have many of them done with what they were allocated over the years? Sadly, we Nigerians tend to focus majorly on the president and the FG, while we neglect our immediate constituencies; the states and local government areas, many of which have become roguish. They do as they like while citizens direct all their angers at the president, many times wrongly.
So, for me, it is not about celebrating the possible increase in monetary accruals to some states but about the Nigerian system and structure being “forced” to adjust to the yearnings of the people. There will be “winners and losers” in the interim but when viewed from the bigger picture, every state will be a winner at the end, if they rise up to the occasion, roll their sleeves and get their hands dirty. In no time, each state will begin to improve their IGR by encouraging legitimate businesses through providing enabling environment.
Another reason I applaud the decision of Federal High Court is the justice of it. How could some be doing the work and some others reaping from where they didn’t sow? I have also questioned why many states in the north which are predominantly muslims and against production, distribution, sales and consumption of alcohol and other “haramic” businesses, based on their religious belief, turned around to share and benefit from proceeds of the same unislamic ventures? Is that Islamic?
We have heard how Hisbah police in Kano state destroyed truckloads of beer in Kano. How they arrested hoteliers suspected of running prostitution ring. Piggery and pork meat are prohibited. All are in line with Islamic belief. How then should Kano share in money from such prohibited sources? That’s inappropriate. This is applicable to most states in the north. Ceding VAT collection on these items to state will “save” northern states from participating in “haram”. That should be applauded by the northerners, I suppose.
In all, the judgement in favour of Rivers state should be seen as deepening democratic tenets by the state and not a “win in a war”. So, nonone should grandstand. Some comments attributed to Governor Nyesom Wike exude that. If true, that will create wrong impression. Demanding and fighting for justice should not be misplaced with vendetta. No, it’s not.
The 36 State governments of the Federation, through their State Attorneys General, just sued the Federal Government, represented by the Attorney General of the Federation (AGF), with regards to the whereabout of 176 billion naira stamp duties collected by the FG from 2015 to date. There was also a disagreement on payment of 455 million dollars as consultancy fees for the Paris Club refunds. States distanced themselves from such “suspicious” transaction. These cases where federating units are asserting their autonomy. It is healthy for our democracy. This is restructuring unplanned!
The earlier those in power realise that a people cannot be forever forced to accept a system that is not serving them, the better for everyone. Likewise, injustice cannot be perpetuated ad infinitum. People will eventually rise to fight against it. And it doesn’t have to be violent sometimes. It’s only in the atmosphere of fairness, justice and equity, that peace can reign, like the end of the second stanza of our national anthem reads:
“To build the nation where peace, and justice shall reign”
May God continue to protect us and guide us aright.
God Bless Nigeria.
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