A Lagos-based politician, Arinola Oloko, has said that time will tell whether Governor Babajide Sanwo-Olu is pursuing the goal for Lagos State to collect Value Added Tax generated within its territory for residents or his political godfathers.
The Social Democratic Party candidate for the Lagos State House of Assembly, Eti-Osa Constituency 2 in 2019, made this known in an interview with Sunday PUNCH on Friday.
The educationist had been captured in a viral video objecting to being called a ‘thug’ by Senator Oluremi Tinubu at the venue of the public hearing on constitution review in May this year.
Oloko backed Governor Nyesom Wike of Rivers State and Sanwo-Olu, for championing the agitation for fiscal federalism for states in the country, saying the autonomy for states was becoming a reality.
VAT is a consumption tax paid when goods are purchased and services are rendered. It is charged at a rate of 7.5 per cent.
A Federal High Court sitting in Port Harcourt an August 2021 judgment, in suit number FHC/PH/CS/149/2020, held that the Rivers State Government had the powers to collect VAT within its territory.
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Although the Federal Inland Revenue Service applied to the court for stay of execution, Justice Stephen Pam rejected the application, saying granting it would negate the principle of equity.
The Court of Appeal sitting in Abuja on Friday, however, asked the parties to maintain the status quo.
WIke, who lamented the injustice in the country, had said Rivers State generated N15bn VAT revenue in June this year, but got N4.7bn in return, while Kano generated N2.8bn in the same month and got the same N2.8bn back.
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He had said that N46.4bn was collected from Lagos State in the same month but the Federal Government gave Lagos N9.3bn. “Sometimes, you don’t want to believe these things exist,” he added.
Wike had also assented to the Rivers State VAT Law 2021 in August after it was passed by the state House of Assembly.
Some states have since followed. Sanwo-Olu on Friday signed the state VAT bill into law a day after it was passed by the Lagos State House of Assembly.
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Lagos also asked to be joined as a respondent alongside Rivers State in the appeal filed by the Federal Inland Revenue Service challenging the judgment of the Federal High Court, Port Harcourt regarding the issue of VAT collection.
Justice Haruna Tsammani of the Court of Appeal sitting in Abuja on Friday adjourned to September 16 to hear the application by Lagos and asked all parties to maintain status quo.
Commenting on the move by Lagos, Oloko said, “It is a brilliant thing to do. Lagos is the Centre of Excellence and with the amount of things that come out of Lagos, it is a good thing for the money not to go out of the state. We generate the VAT. The state would have some financial control without going to Abuja for peanuts.
“The Federal Government can’t be collecting the money for something that we consume and produce here and at the end of the day, the state is always waiting on the Federal Government before they get anything.”
The politician said governors must be accountable to the people and not to their godfathers.
“Whether he is doing it in the interest of his godfathers or not, whatever it is, this has helped to open our eyes to the fact that we need to elect leaders that are accountable and take us into consideration.
“This is an eye-opener for what is ahead. We have all been talking about autonomy, this is a tip of the iceberg of what it would look like when we finally have autonomy and what the governors would be able to do and what they cannot do. It is now up to us to say that this VAT that would be collected, will it be beneficial to us,” she said.
“If he (Sanwo-Olu) is doing it for someone else or for his people (Lagosians), we would know, time would tell. But everyone should open their eyes now and ask for accountability and where the money is going into.
“My word for Governor Babajide Sanwo-Olu is that it is time for accountability, we want him to be accountable, transparent, and responsive towards Lagosians. There are people out there waiting to follow how the money is going to be spent if the state wins its VAT war.
“It is chance for him to show that when autonomy really comes, he would do the right thing and stand for the people of Lagos State and not for anybody else, I don’t want to name names. He should apply it to where it should go to. He should not just look at the money but know that we are watching and responsibility comes with the money.”