Skip to main content

Value-Added Tax Controversy Shows Why Nigerian Government Should Diversify Economy — Political Movement

September 23, 2021

The group urged the government to consider not only diversifying the economy but also ensuring justice is served in cases of money laundering.

The Peoples Alternative Political Movement (TPAPM) says the recent controversy over the collection of Value-Added Taxes should inform the decision of the Nigerian government to consider the diversification of the economy. 

According to the group, some states appear to be poorer than others despite the mineral resources they possess. 


It stated this in a statement issued by the TPAP-M leaders, Jaye Gaskia and Omotoye Olorode on Wednesday.

TPAP-M said contrary to the interpretation that the recent legal victory recorded by the Rivers State Government in the struggle over the collection of VAT had widened the north-south dichotomy, it has implications for the revenue of the majority of the states and local governments in the northern and southern parts of the country. 

The group urged the government to consider not only diversifying the economy but also ensuring justice is served in cases of money laundering. 

It said this would go a long way in recovering funds that have otherwise been looted. 

It further decried the problem of insecurity in the country as well as the decay in governance despite Muhammadu Buhari's claims that he had come to fight corruption.

TPAP-M noted that the Buhari administration has failed woefully by subjecting citizens to hardship as the apex bank continues devaluing the naira through dollarisation while claiming inflation is under control. 

The statement reads partly: “No doubt, the VAT controversy has challenged the federal government, state and local governments to stop paying lip service to the diversification of the economy. 

”The majority of public enterprises have been run aground by the ruling class. Not a few factories have either shut down or relocated to neighbouring countries due to lack of electricity and the exorbitant cost of doing business in Nigeria. This means loss of thousands of jobs and dwindling revenue including VAT and other taxes. 

“We insist that there is no state in Nigeria that cannot generate enough adequate revenue to address the challenge of infrastructural decay and lack of social amenities.

”For instance, gold and other solid minerals are illegally mined and exported from Nigeria on a daily basis. It was reported that Nigeria lost $3 billion to illegal gold mining between 2012 and 2018.

“The losses have multiplied with the connivance of public officers including security personnel. During an investigative hearing by a Senate committee last week, the Minister of State for Mines and Steel Development, Uche Ogah, accused the elite of undermining the country’s tottering economy by aiding and abetting gold smuggling and illegal mining to the tune of $9 billion yearly. 

“The Minister revealed that smuggling is now carried out by some private jet owners. The bulk of the smuggled gold is produced in Zamfara State. Yet, it is one of the poorest states in Nigeria!

“Have we asked why the revenue generated from the mining sector is largely withheld from the Federation Account and cornered by a few unpatriotic elements and their foreign collaborators? 

“Have we paid attention to the fact that the mining companies are killing innocent people and destroying the environment in many states without any reclamation plans? 

“Why have the police and other security agencies failed to arrest and prosecute the highly placed criminal elements?

“In the same vein, the Department of Petroleum Resources (DPR) says that Nigeria consumes 38 million of litres of fuel per day while the Nigerian National Petroleum Corporation claims that the figure is 103 million litres due to the criminal activities of smugglers. 

“This means that 45 million litres of fuel imported by NNPC are daily stolen and smuggled out of Nigeria. Thus, hundreds of billions of Naira are diverted from the Federation Account by the NNPC to fund the alleged smuggling of fuel to neighbouring countries. Instead of ending smuggling of imported fuel and solid minerals including gold, the government prefers to increase the pump price of petroleum products and electricity tariff."

It recalled that Nigeria was once the "largest producer of palm kernel and cocoa in the world". 

"Today, both products sell much more than crude oil in the international market. In the past, Nigeria was self sufficient in food production," it added. 

It continued, ”Today, Nigeria spends billions  of dollars on food importation. The situation has been compounded by abduction of farmers and destruction of farms by armed herders and terrorists. The implication is that Nigeria will spend much more on food importation this year and beyond.

“The Central Bank of Nigeria (CBN) has continued to sabotage the national economy by resorting to the reckless devaluation of the national currency through dollarisation. Even though $1 is now exchanged for N560, the CBN says that the Naira has not found its actual value. It is common knowledge that the costs of food and other items have gone out of control but the CBN claims that inflation is under control. 

“The Federal Government has resorted to borrowing to pay salaries while many states and local governments are owing arrears of salaries for over two years. The Federal Government has continued to mortgage the future of hapless citizens by piling up external loans. Yet the CBN and the Federal Ministry of Finance claim that the economy has continued to record growth! 

“ASCAB recently wrote to the Federal Government to recover N94 trillion which has been diverted, withheld or stolen from the Federation Account. The Federal Government did not dispute the claim but did not acknowledge the letter. 

“The Buhari administration has since abandoned the fight against corruption which is one of its cardinal programmes. The politicians charged with looting the treasury to the tune of several billions of Naira have decamped to the All Progressives Congress (APC) in order to have the criminal charges against them dropped as they have been completely forgiven. 

“Once the corruption cases are withdrawn from the courts the corrupt opportunists will keep their loot. Whatever may be the outcome of the case being pursued in court by the Rivers State Government, VAT collected from the people should not be increased for any reason whatsoever. 

“However, it is recommended that banks and other financial institutions  

be made to contribute substantially to VAT. Furthermore, as FIRS and NCS are public institutions that are performing their statutory duties there is no justification for allowing them to deduct from the revenue from VAT. More so that the Federal Government is allocated 15% of the revenue from VAT.”