Law

Bill on VAT control: Lagos 57 councils demand equal sharing with state govt

Gov Babajide Sonwo-Olu, Speaker Mudashiru Obasa, Speaker Lagos Assembly and Abdulrasak Ajala, Secretary, Conference of 57 LGAs& LCDAs in Lagos

By Ezurike Ugochukwu

The ongoing demand for the control of the Value Added Tax (VAT), by Lagos State and other states may have given rise to new demand by the 57 Local Governments and Local Council Development Areas (LCDAs) in the state for 50:50 sharing formula with state government.

Abdulrasak Ajala, Secretary, Conference of 57 Local Governments and Local Council Development Areas (LCDAs) in Lagos State made the request at a one-day public hearing on the bill organised by the Lagos State House of Assembly on Wednesday.

In the bill titled, “A Bill for a Law to impose and charge Value Added Tax (VAT) on certain foods and services, provided for the administration of the tax and for related matters”.

Ajala who is also the Chairman of Odi-Olowo/Ojuwoye LCDA, explained that for the councils to pursue meaningful development, they required a better sharing formula for its members in the proposed VAT law.

The conference secretary said they were requesting for a 50-50 sharing formula, contrary to the 75-25 proposed in the bill in favour of the state government.

Ajala explained that the councils, who also host the companies, should benefit from a better share than the 25 per cent in the bill since they are the closest to the grassroots.

The council chairman commended the 9th Assembly for the bill, as well as the synergy between the Executive and the Legislature.

“On the distribution of revenue, you will agree with me, Value Added Tax is on consumption and production, and all these economic activities are domiciled in our respective communities.

“In addition, local governments, being the closest to the grassroots, need more revenues given the enormity of the responsibilities the Constitution confers on us.

“Hence, the 25 per cent in the bill is grossly inadequate for local governments to execute all the promises we made to our people; and of course all our electoral promises.

“This is the reason we are making a passionate appeal, on behalf of Conference 57, that we should raise the bar higher, from 25 per cent to 50 per cent,” Ajala said.

Olowo

In his statement, the Chairman, House Committee on Finance, Rotimi Olowo, insisted that it would make no sense if all monies accruable to Lagos state was taken by the Federal Government.

Olowo argued that given the pressures on the state governments in terms of infrastructure development, the proposed law on VAT in the state would bring about holistic development of the state