VAT row: Wakeup call to feeding bottle governors

The recent moves by the Rivers State Governor, Nyesom Wike and his Lagos State counterpart, Babajide Sanwo-Olu to start collecting Value Added Tax (VAT) have sent shock waves on docile and feeding bottle governors who always look up to the federal government for survival.

Rivers and Lagos State contribute over 70 per cent of collectible VAT to the federal government’s coffer which is later redistributed to all the states of the federation irrespective of whether they contribute anything or not.

A recent report says that over 30 states risk bankruptcy once the two states begin to collect VAT directly.

While Rivers is set to begin collection of VAT this September aftermath of a Federal High Court’s judgment; Lagos is in the process of enacting a law to start collections of VAT.

No doubt, the emerging development is a wakeup call to docile governors who have refused to think out of the box on how to boost their internally generated revenues. Every state has abundant resources that can be harnessed to boost their revenue but the governors would rather wait to be spoon-fed from federal allocations at the end of every month.

Many industries in states which would have been revived to generate revenues are lying in ruins while some of the governors have put them up for sale. We cannot continue this way. Each governor must begin to think of how to boost their internally generated revenues and be self-sufficient. The era of robbing Peter to pay Paul is over.