Wike’s VAT revolution

A joke is currently reigning in Rivers State about Ezenwo Nyesom Wike. It is woven around the Wike of old. The joke came from the time of a Wike that reigned when our democracy was still at infancy. The pithy anecdote posted on the social media by Mr. Chris Finebone captured in a few words the era of Wike as a council chairman in Rivers State. Then he served as the chairman of Obio/Akpor Local Government Area of the state. And he stood out for many things. One of them was that his council generated so much revenue that it was the second highest in the country. Only Lagos Island Local Government raked in more money than Wike’s local government.

That time, the fear of Obio/Akpor tax system was a way of life. There was a Wike in charge and there were the “Obio/Akpor boys”. It was an appellation which many of us didn’t understand. He was also the chairman of the defunct (?) Association of Local Governments of Nigeria (ALGON) in Rivers State and was also its national president. “Who says experience of revenue collection in Obio/Akpor is not vital? Check again! #ThankyouGovernor” Finebone had stated. To those who understand the joke, I give you a pass mark. Those who would not understand Finebone are excused. There is a world of gap between when he was a local government chairman and now.

Ezenwo Nyesom Wike’s tax moves have made him a revolutionary of sorts. Some have always seen him as colourful and a go getter while his ways infuriate some. He is today the Governor of Rivers State of Nigeria, the state also known as ‘Treasure Base of the Nation’. In simple terms, that alias came because Port Harcourt, the capital is the headquarters of the Nigerian hydro carbon industry. He could be have been recognised as the revolutionary he is moulded as much earlier had we put ourselves on notice when he emerged on the political scene. That, however, is also for those Nigerians and citizens of Rivers State who are just getting to know this or him. Dr Peter Odili, who sat (and perhaps still sit) atop a political throne with men including Governor Wike, Chief Azubike Merukini, the late Mr. Akeodi Oyagiri and Chief Nnamdi Wokekoro as its legs, would know what I mean.

They would say that Wike is not a new phenomenon. When he was Obio/Akpor Local Government chairman, the local government secretariat he built in Rumuodumaya then was jocularly referred to as ‘Obio/Akpor Government House’ because of its magnificence. He worked with Dr Odili and with Rotimi Amaechi and now has brought his revenue-generating acumen to bear as the governor. Rivers State, according to those who know, is generating more revenue with him in charge than it had ever done. What many observers think is that he has brought forth the knowledge of yore. Many administrators in the state learnt from the ideas of that popular tax man of some years ago, Mr. Olusola Adekanola from Kwara State. Adekanola worked in Rivers State during the military administration of Colonel Dauda Komo. It was said of Rivers State that “when Dauda Komo came as administrator, Rivers IGR was less than N100 million per annum but when Adekanola came on the scene, we generated in one month what we made in one year.”

That is a sketch of the background Wike is coming from in terms of tax and revenue generation. He simply reactivated his revenue-generating acumen. But it is still a puzzle why he has waited this long, if the idea to go to court is truly not new? However, if it is true that “everything about governance at all levels in Nigeria is about revenue for the government on one hand and projects on the other,” then there will be war. There is bound to be the kind of reaction that Wike’s action as regards Value-Added Tax (VAT) collection in Nigeria is concerned.

In my Abia locality, a common saying is that “ghori-ghori na-akpo anya”. We were warned a lot by that statement whenever we stopped being wary. It literally means you could go blind by some careless play. It is common for young children to descend into some flippant acts which could destroy one of the eyes or both of them. Those who have risen against the move made by Wike are in this frame of mind. Katsina has wailed. Gombe has begged. Others are still not talking. They are reading and trying to interprete the body language of some higher authorities on the VAT matter. But they know that the move by Wike would spread and it could lead to fast fiscal blindness. Wike has generated friends, colleagues, enemies, mentees, coadjutors etc around the country. That is one of the reasons his trail-blazing court case against the collection of VAT by the Federal Inland Revenue Service has generated a lot of discussion in political, government, religious, commerce, manufacturing and sundry circles.

Indeed, since VAT was introduced in the country to replace sales tax during the regime f General Ibrahim Badamasi Babangida, there has been controversy. Most of the things said about tax collection and redistribution in the country has been about the administration of the revenues so collected. Tax administration is at the heart of any government and, woven into the management of the regular huge sums is what led Don Tomasino to contend that politics and crime are the same thing. VAT hasn’t been as controversial in the United States as it is in Nigeria since the idea of sales tax came up there in 1935. The Federal Government collects VAT on contracts awarded by states and shares the proceeds with other states that have nothing to do with the contract. That is one of the allegations of Wike.

The opinions on VAT collection in Nigeria since the august 10 Federal High Court ruling have varied. They have moved from bitter acrimony to sound propositions and some things in-between. Someone has suggested that “the National Assembly should make VAT a tax at the point of consumption instead of production tax at factory or port. That will also eliminate trade on Northern grains used in making beers in the South and alcohol consumption in the North.” Another suggestion is that the tax administration in Nigeria deserves a total overhaul.”It will have to be perfected, a total overhaul of the processes of the administration. For instance, with the emerging scenario, won’t there be ‘input and output value-added tax’?

The courts might make a mess of the ideas of Wike, but whether we agree or not, Wike has sparked a fiscal revolution in the country. We have a new Federal Republic of Nigeria in the horizon.

 

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