Following the ongoing fight between the Federal Inland Revenue Service, FIRS, and some states over right to collect Value Added Tax, VAT, the Manufacturers Association of Nigeria, MAN, has indicated that the business environment may be polluted.
Mr Segun Ajayi-Kadir Director General of MAN has stated: “The recent controversy over the control of VAT between the Federal and state governments is unhealthy for business. This is more so at this time that the economy is showing signs of full recovery and reasonable growth.
“Manufacturers, like many other business operators in Nigeria, are deeply concerned about what becomes of their fate come September 20, 2021, when businesses are expected to file VAT claims and beyond.
“The contentions are worrisome and potentially inimical to the smooth operations of our businesses. On the one hand, FIRS is insisting on continuing to collect VAT, on the other, Rivers State government is ordering immediate and complete collection of the same tax. Lagos State is preparing the ground to go the way of Rivers State. Who knows, other states may be warming up to join the fray.
“As the leading payers of VAT in Nigeria, having contributed N44.9 billion in the first half of 2021, according to NBS, the manufacturing sector is going to be hardest hit by this looming impasse.
“What we expect, therefore, is for the Federal and State governments to stop the grandstanding and find a mutually acceptable way forward. The business community can ill afford the anxiety and confusion that this controversy is generating. 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.”