In a recent analysis of Nigeria’s Value Added Tax (VAT) system, Dr. Jonathan Asake, the former president of the Southern Kaduna Peoples’ Union (SOKAPU), shed light on alarming disparities in the distribution of VAT revenues among the various states. His observations indicate a critical imbalance that could hinder economic growth and development across the nation.
In an interview with The Sun, Dr. Asake highlighted that Lagos State, Nigeria’s commercial hub, contributes an impressive N400 billion in VAT annually. However, the state receives a mere N40 billion in return.
Conversely, Dr. Asake pointed out that Zamfara State, known for its lower economic activity, contributes only about N400 million in VAT but receives around N5.9 billion.
According to Dr. Asake, such an imbalance does not incentivize states to strive for economic growth or to explore creative avenues for revenue generation.
His words,
“If you look at the VAT profile, Lagos State alone remits about N400 billion and they take in about N40 billion in return, while Zamfara State that gives the least about N400 million, takes about N5.9 billion. So, it doesn’t encourage creativity and productivity. The Northern states take in VAT that they don’t give and that is why they are protesting against this.”