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NEWS UPDATE: Seun Bisuga:  Proffering solutions to Nigeria’s VAT quagmire

NEWS UPDATE: Seun Bisuga: Proffering solutions to Nigeria’s VAT quagmire

I have perused and paid attention to numerous contentions on the VAT banter. While a few group have spoken according to an educated point regarding view, others have displayed sheer obliviousness on the VAT matter. As I am no assessment master, I don’t expect my position wholeheartedly believed yet I think we have at last started rebuilding ourselves, by ourselves.

Permit me to begin from what I think ought to be the goal to this VAT matter on the off chance that we truly need value and decency across Nigeria. As far as I might be concerned, there are two significant goals as things stand now. The first is that the Federal Government of Nigeria, the Federal Inland Revenue Services and the State Governments should concur on another sharing recipe for VAT. While the current half to the State, 35% to the neighborhood government and 15% to the national government – which is the current course of action – is more than reasonable, there is a requirement for a review.

Like we have 13% to oil delivering states since that is the place where Nigeria gets oil from, we ought to have another plan for VAT. The top states will get uncommon VAT determination while others will get an equivalent portion of VAT. For instance, on the off chance that we concur that Lagos gets 75%, the Federal Capital Territory could get 65% while Rivers could get 58%; Kano and Kaduna can get 55% separately while different states get suppose 40% each.

This way, the best six states will get a decent amount given that they burn through cash on foundation inside their states, they have supported Ease of Doing Business somehow in addition to there are other natural and monetary liabilities that they need to manage.

Secondly, the Federal Government should assist with fostering certain states by settling on some cognizant approach choices. For instance, in case Nasarawa isn’t contributing sufficient VAT, it may be the case that the Federal Government’s essence in the state is extremely low. The Federal Government should take a gander at a portion of its lucrative organizations and conclude that it needs to home their central command across Nigerian states fairly.

For model, the Federal Government can set up the base camp of migration benefits in Nasarawa. So rather than Nigerians hanging tight for visa booklets from Australia, Switzerland, and so on, the industrial facility that will create booklets will be set up in Nasarawa. This will perpetually imply that specific organizations should settle in that state and this will affect convenience, food utilization and eventually the economy of the state in one manner or another.

Mind you, the six expresses that as of now contribute reasonably to VAT starting today ought not make any commotion about the FG leaving or disregarding them, there should be an arrangement that the 31 states that are not contributing enough ought to be given priority.

Then there is the contention of how Kano has restricted life sized models, liquor, cigarettes, and so on from working in the state yet gathers from VAT. Again for reasonableness, Kano ought to be rejected from profiting with the returns of these items on the grounds that for what it’s worth, apparently they are eating their cake and having it.

For lucidity, it is significant that Nigerians realize that there are sure things that we don’t pay VAT on. I have seen individuals pose up extremely interesting viewpoints about paying VAT on agrarian produce, I don’t think this is true.

The 2019 Finance Act avoided VAT on the accompanying things; all clinical and drug items; fundamental food things; books and instructive materials including instructive exhibitions and educational cost from nursery to tertiary education.

Other things are child items; all sent out labor and products; imported machines for use in the Export Processing Zone (EPZ) or streamlined commerce zone; manure and privately made farming prescriptions and rural gear; life coverage and transportation administrations for public use.

Also rejected are rent on private property; hardware for usage of gas in down-stream oil tasks; microfinance banks, people’s bank and home loan establishments administrations; and privately made clean towels.


The VAT contention from state governments which is similar to what is drilled in the United States will advance limitation that will be both positive and contrary. My protected conjecture is that it will to a great extent sway a few states particularly those 30 states at the underlying however hence things may improve.

If each state were to execute its own VAT system, then, at that point that implies a few organizations should get together shop. My meaning could be a little more obvious. Allow us to take the media transmission organizations for instance. Media transmission organizations will take a gander at their incomes in specific states and verify that it isn’t beneficial to keep on paying VAT in this state given their profit from speculation, so they may choose to leave. In any case, how would they move their base stations, poles, etc.

Instead of going through cash evacuating this weighty gear, they can arrive at an arrangement with a neighborhood financial backer who should put resources into the tech area locally. The new organization may be hoping to put resources into perhaps one, a few states just, however they will have wandering offices on their innovation that will permit their clients proceeded with admittance to their administrations even get-togethers have left their space of coverage.


There is no question that the VAT discussion will constrain state governments to look inwards. The times of living in Abuja while you are legislative leader of a state are finished. You should dwell in your state and realize what is happening in there. Furthermore, the times of free cash from Abuja while you don’t do anything is likewise over.

I anticipate that governors should delegate probably the best financial specialists they can discover to hotspot for financial backers enthusiastically. These monetary specialists will take a gander at what the state has and how they can boost the potential there.

With financial backers come work creation and with occupations come a nice way of life. The fundamental financial matters that have evaded us in the past should be returned to and implemented.

VAT is just the start of our rebuilding, we need to awaken and understand that this is 2021. Defilement should be checked, secrecies should be sacked and the interest of individuals should be put first.

_Seun Bisuga is a columnist and political analyst_

Seun Bisuga: Proffering solutions to Nigeria’s VAT quagmire

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