Opinion

VAT: Another Demerit Of Creating Additional States

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By Abdullahi Dahiru

About one 1month ago, I commented on the post by a friend writing about the merits of a state created out of Kano state and believe it would help the residents of the new and old Kano state.

The supporters of state creation mentioned many merits ranging from construction of federal secretariats, new buildings for federal agencies, and even listed more governors and ministers.

I mentioned then that many states survive on federal allocation which we know may not be enough to fund these bureaucracies or not sustainable in the long run.

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I read today that Gombe state commissioner of finance Mohammed Magaji has appealed to some southern states to reconsider their stand on VAT collection issue and be their ‘brothers’ keepers’ to continue sharing VAT generated in their states with their Northern counterparts. This followed Rivers state governor’s suit challenging VAT collection by the federal government which he won.

Last week I was listening to the radio and heard an analyst saying the strength of Northern states has to do with a large population which gives them an advantage when federal allocation is shared. Many even complain regarding why some states like Bayelsa with small LGAs get a huge federal allocation.

I believe Northern states, their policymakers, and analysts should look inward and come up with more sustainable ways to fund their budgets. The day of boosting about the size of the population to get federal allocation may be close to being history. If the suit of Rivers state goes to the Supreme Court and wins, many Northern states may lose huge allocation.

The days of thinking that the creation of new states or LGAs would bring development are gone. There is simply no money to fund such kinds of newly created states and LGAs. The older states and LGAs are even too many.

 

Dr. Abdullahi Dahiru is a public affairs analyst and a medical Doctor who wrote this from Kano

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