 Value-added tax is the world's most common form of consumption tax. It is a difference between the business sales and the purchase of goods and services from other businesses. With more than 160 countries using a value-added taxation system, this system is mostly used in the European Union, which the United States is not one of them. In Nigeria, the Federal Inland Revenue Service adds the responsibility of collecting vats on behalf of the 36 states and the federal capital territory. This is shared among the federal, state and local governments as an allocation with the federal government, taking 15 percent, whilst the states and local governments shared remaining 50 percent. A federal high court in Porta Cote ruled on the 10th of August 2021, restraining the Federal Inland Revenue Service from demanding taxes from the residents of river states, which impliedly affects other states. It further ruled that states should commence the collection of vats, which the value-added tax and personal income tax. During this groundbreaking ruling, the Lagos state government has demonstrated its consent to begin collection of value-added tax with a proactive strategy in compliance with the new reform. Lagos has further directed the Federal Inland Revenue Service to stop using demand notices for payment of vats and further instructed the FIRS to render the accounts within seven days of all the sums collected. By the court order, both Governor Wike of River States and Governor Babajide Sanwolu of Lagos States had signed into law bills authorizing the state government to collect a value-added tax, a move being resisted by the Federal Inland Revenue Service. Meanwhile, states like Gombe and a few northern states have appealed to the southern governors to rescind their steps and seek continuation of the process that allows the FIRS to collect vats. States like Delta, Kaduna, Oyo, Katsina, Kanu may experience a minimal impact, while other 30 states that account for lower revenue generation within their states are currently perplexed on what steps to take. Surprisingly, majority of the northern states have opposed the ruling of the court considering its huge impact on the state revenue as they have solely relied on the federal government without deliberate strategies for internal revenue generation within their states. This new legal reform will impact positively the financial and social economic sectors of the economy as the state and local government will no longer rely on the federal government to boost their internally generated revenue. With all states having to take charge of their territories, this will urge states to look inwards and seek ways to diversify their economies. States with dormant revenues will seek to venture into tourism development, production of resources, and massive development of agriculture without total reliance on the all sector. With about 30 states generating less than 20% of the Nigeria's value added tax, these states will suffer significant revenue decline until they seek meaningful strategies to raise sufficient revenue for state growth and development. Conclusively, it is pertinent for states to look inwardly and develop proactive strategies for internal revenue generation, which would be of immense good to the national and global development of the Nigerian states. Guys, what do you have to say about the issue of tax? The issue of grand commander, I was happy, it's enough, on a serious note, it's enough. Now that the courts have said people should go and collect their UNVAT themselves, we have been shouting about the federal government releasing the hold on things like what is in mining in the states, so that states that have the capacity can do whatever they need to do to generate whatever. So now this will have that rebound effect. If the northern states want to be serious, that's where they should get their representatives to work now. And say, look, we can't do this thing unless you people sit down and help us remove this chain that is on us, so that we'll be able to use the federal government is not involved, work out a formula, maybe we'll give them 15% of whatever it is that we generate or but I think it's enough. We can't have states relying solely on other states for survival. It's not fair. For example, I think the one that has really come up is the issue of the alcohol, that it is part of that. You take the VAT from alcohol, you just nobody's, no, none of the northern countries states, please remove that part of that bad part of the VAT. We don't want it. They collect it. Yet when people who are supposed to be living in a country that is secular want to sell the alcohol in the state, you seize it and you destroy it. But you collect the money from the federal government. So it's in the double standards. You know, I want to bless that judge. You know, I would never have thought that the political climate of Nigeria, which is usually destructive, will produce something good because it's it's kind of but states that are doing well like Lagos should also keep one clear thing in thought. If there should be a clear structuring down like this, Lagos will not be the one with a pot alone. And that will cut down more than 70 percent of Lagos revenue. Lagos should wake up to it. No, I'm looking at it. The competition. No, it means that the competition is on. And this is exactly what we want because you cannot have states. For me, if Zamfara cannot function, Sokoto states should buy them. That is no, it's true. Countries right now, countries in the world right now operate like businesses. If I'm Sokoto state and Zamfara, OK, you have a problem. OK, you know what? Become part of us. Our governor is your governor. Merge will take it. The honest and rights to the federal government. Pass it by national assembly. There's nothing wrong in that. I feel we have too many states because if you look at the generation of that Lagos, Aquabomb, Kadena and the rest are funny people. As in they are below par. You know, you kept saying northern states funny. There are a lot of southern states in this. Abia, for Abia is totally doing nothing. They are based by the federal government. There are a lot of southern states in this. So I feel very strongly that every state in Nigeria has a potential. Yes, it's just a question of thinking, of actually doing the hard work and the diligence of thinking. I don't think there's any states that by itself is useless. However, if you have done this thinking for four or five or ten years and you find that you are not useful, by all means, merge with another state. Why do you have 36 states and only six to ten states are actually generating income? Then why do you have the remaining states? It's just for the, I mean, for the purpose, for the vanity, the purpose of say, oh, we have 36 states. If we need ten states in Nigeria, so be it. Let's have ten states. We need, they need to go. They need to go. This is something. I mean, I feel like every state has potential. It just takes, I mean, give me any states in Nigeria and put a think tank in that state. They will tell you exactly what you can do with that state to generate income. The federal government holds on the resources of the states. That's it. So that's why I'm saying that the states too need to wake up and make their own representative. Well, comfort, do you know why the federal government can put their handcuffs? States, too, they have refused to let go of the feeding bottle of central. They want to, like in this situation with that, you will notice that they want to collect the vote. They still want to collect federal allocation from say, have now, it doesn't work that way. Imagine if they didn't have any vote. You would start thinking and saying, oh, we have two reasons. Oh, we have this resource. So that's what happens. If we want to cut off that supply, then people start to think. How's the Yobes state? When I got to Yobes state, the first thing I thought of was a desert rally. It's that beautiful. I have that. Small Oasis. Imagine. That desert has been, Dubai has been a desert for how many years? Look at what they've done with it. Yobes is finer than Dubai because it has those small Oasis which are more. And then you have those palms, they are shorter distance. They are not like the Sahara desert. Before you see what I trek. See how we killed Tinapa. Tinapa was killed. I think what even hurts me the most is why we don't have a five-star hotel with a golf course at the confluence. How many confluences are in the world? There are just about three. Could be sleeping. Could be in the Yobes state, you know? I want to believe that if we can have more people, more indigens of all these states that are not as developed as that of Lagos and Abuja, if we can have a lot of them come out to want to privatise some of these businesses, I think that what they can do will be more than what the government can do because then it's something that they are spending their own money on and they want to develop their states and give them more global recognition. But the government is not ready to let go of that. It's not even the government. What scares the people is the fact that once the governor changes, the money you've invested, you'll short... That's where the problem comes from. But you see, this fact thing is a good thing. No, it's a good thing. I couldn't believe it. Absolutely. We know that it's not from the heart of they want to do what. But we are glad we were happy to hear this guy here. Absolutely. So we'll keep this conversation going. The issue of vats cannot be overemphasised. Adibola is next after this break. Stay with us.