By Gbenga Akingbule
There are strong indications that many states across the country will go bankrupt if moves by some state governments to enforce implementation of Value Added Tax (VAT) laws sails through. Borno state Commissioner of Finance, Budget and Economic Planning , Hon Adamu Lawan has said.
Adamu stated that the immediate effect of the VAT collection by state governments will be the resultant shortfall in revenue allocations to the three tiers of government.
This was disclosed recently after the Borno state Ministry of Finance , Budget and Economic Planning gathered statkeholds at the Multipurpose Hall of Government House Maiduguri to make input into the 2022 budget.
According to Lawan , only two states and the Federal Capital territory will be able to sustain their financial obligations if and when the full implementation of VAT collection by state governments begins.
” Many states will go bankrupt if state governments commence full implementation of their VAT collection laws as being championed by Rivers and Lagos states.
” To be quite honest, only two states and the Federal Capital Territory can sustain their financial expenditure.”
However, Hon Lawan also sees the VAT collection move by state governments as good opportunity for them to put on their thinking cap and explore more areas of boosting their Internally Generated Revenue (IGR) .
The Borno Commissioner noted that state governments should not only dwell much on the immediate consequences of VAT collection by their counterparts but see the long time opportunities that will even make state governments more financially independent .
” If the VAT collection by state governments is enforced , we have no option but to comply .
” In times of adversity, a lot of potentials will come out and we will think even without the box not just outside the box and even stop relying on the Federal Government for out expenditures ” Lawan said .