Manufacturers Call for Speedy Resolution of Controversy Over Value Added Tax Collection

The Manufacturers Association of Nigeria (MAN) has strongly appealed to the federal and state governments to find a mutually acceptable resolution of the controversy on which tier of government would control the collection of the Value Added Tax (VAT) from businesses in the country.

A press statement that was issued yesterday by the Director General of MAN, Mr. Segun Ajayi-Kadir, stated clearly that manufacturers could not afford the anxiety and confusion that this controversy has been generating.

Ajayi-Kadir said: “The recent controversy over the control of the VAT between the federal and state governments, the seemingly conflicting court judgments and strong statements emanating from the two tiers of government is unhealthy for business.

“Manufacturers, like many other business operators in Nigeria, are deeply concerned about what becomes of their fate come September 20 when businesses are expected to file value-added tax (VAT) claims and beyond.

“We should not be made to suffer while the two tiers of government fight over who should control VAT. Also, we should not be put in a situation where we have to pay both governments the same tax. This will amount to overkill for the struggling manufacturing sector, and I dare say, a recovering economy. This is potentially dangerous, not only to the profitability of the manufacturing sector; it is ruinous to the disposable income of the average Nigerian consumer.”

The controversy was stirred by recent court judgment that granted the Rivers State Governments the right to collect the VAT from businesses in the state.

Currently, the Rivers State has enacted and signed its VAT law while Lagos State is in the process of enacting its own version of VAT law.

But the manufacturers’ association has stated that it would be worst hit by the controversy.

The MAN said: “As the leading players of the VAT in Nigeria (having contributed N44.9billion in the first half of 2021, according to NBS) the manufacturing sector is going to be hardest hit by this looming impasse.

“The contentions are worrisome and potentially inimical to the smooth operations of our businesses. On the one hand, The Federal Inland Revenue Service (FIRS) is insisting on continuing to collect the VAT. Rivers State Government is ordering immediate and complete collection of the same tax. Lagos State is preparing the grounds to go the way of Rivers State. Who knows, other states may be warming up to join the fray.”