VAT War: Why FG should review sharing formula – Ex-Finance Minister




By Harry Awurumibe, Editor Abuja Bureau

Nigeria’s former Minister of Finance and National Planning, Dr. Kalu Idika Kalu has weighed in on the the controversy trailing the collection of the Value Added Tax (VAT) in the country, saying that a review of the tax law should be undertaken without further delay.

He also stated that those paying the consumption tax should benefit maximally as VAT is collected where goods and services are rendered.

Speaking on African Independent Television (AIT) breakfast programme Kakaaki on Tuesday, Dr. Idika Kalu who served under the military governments of Generals Ibrahim Babangida and late Sani Abacha (Rtd.) when VAT was introduced, insists that time has come for the review of the VAT law and sharing formula.

According to him: “the current fight over VAT collection is unnecessary. There are a lot to it than the public can understand but the time has come for the Federal Government to set up a small committee to take another look at the VAT law especially the sharing formula and fine tune it to suit the present realities in the country”.

The financial expert who was in the panel that set up VAT during the military regime said it was done with the best of intentions, although he revealed that the panel relied much on the input of then Head of of the Federation to fix the sharing formula and who collects the VAT.

But he insists that: “there is notting sacrosanct in revisiting the issue especially on who should collect VAT.


“This is why I want the government of the day to quickly set up a small team of experts who are knowledgeable in this matter to seat for four or five sessions to arrive at an agreeable stand on who collects VAT and who gets what”.

Dr. Idika Kalu argued that if a proper is carried out in the country, the citizens will be better for it, adding that: ” I will want to see a modern Industry state and a situation where the Local Government Authorities will be allocated more money to undertake critical projects close to the masses while they could be supported by the central government if they cannot meet up with financial demands “.

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