A few days ago Nigerians were greeted with the announcement that a high court sitting in Port Harcourt, Rivers state has granted Rivers state the right to collect Value Added Tax (VAT), a tax hitherto collected by the Federal Inland Revenue Service (FIRS). The FIRS is a Federal Government agency that is saddled with the responsibility to collect VAT on behalf of the FG and states.
The collection of VAT has been the responsibility of the FIRS and based on the agreed revenue sharing formula, the Federal Government gets 15 per cent, while states share 50 per cent, and local governments share 35 per cent. The portion to states and LG are further shared using 50 per cent based on equality, 30 per cent on population while the balance of 20 per cent is on derivation.
According to Investopedia, VAT is a consumption tax that is levied on a product repeatedly at every point of sale at which value has been added. It is charged at the rate of 7.5 per…
Source: Guardian Newspaper