The battle between states and the Federal Inland Revenue Service (FIRS) has taken a new turn as the Nigerian Organized Private Sector (OPS) is seeking clarification on who should collect the Value Added Tax (VAT) received by businesses.

The VAT, which was collected for the month of August, 2021, is due to be remitted on September 21 but there is confusion as to the party that should rightly collect the taxes.

Recall that the Rivers and Lagos State Governments have been at loggerhead with the FIRS over the collection of VAT; a development that saw Southern Nigerian governors throw their weight behind Governor Nyesom Wike and Babajide Sanwo-Olu respectively.

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This event, which is an offshoot of the tussle between the Federal Government-owned FIRS and States in the southern Nigeria means:

  • The Organized Private Sector, comprising Manufacturers Association of Nigeria (MAN) Nigeria Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA) Nigeria Employers Consultative Association (NECA) Nigeria Association of Small-Scale Industries (NASSI) and Nigeria Association of Small and Medium Enterprises (NASME), have postulated that should the struggle between the parties linger, they would have to approach a competent court to seek clarification and keep the August VAT until given proper instruction.
  • If the OPS have their way, the September allocation to states across the federation will be affected. The 36 states are expected to get their monthly allocation in two weeks.
  • Also, the Nigerian National Petroleum Corporation (NNPC) issued a statement, saying that it will deduct a total sum of N215.32 billion from its remittance to the Federation Account and Allocation Committee (FAAC) in September 2021, this means a further reduction in the amount meant for states.

Taiwo Adeniyi, chairman of the Organize Private Sector, stated that the ongoing war between some states and the FIRS has a negative implication on businesses and Nigeria’s fragile economy, adding that the parties have succeeded in throwing businesses in a state of confusion.

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