Lagos State insists on VAT collection

The Lagos State Government has reiterated its commitment to collecting Value Added Tax (VAT) following a recent court ruling in favor of sub-national states in Nigeria. The Federal Inland Revenue Service (FIRS) had advised the public to maintain the status quo on tax payment, but Lagos State remains steadfast in its position. Johnson Chukwu, CEO of Cowry Asset Management, shared his insights on the matter in an interview with CNBC Africa. Chukwu emphasized that the legal interpretation of the constitution supports the states' authority to collect and appropriate VAT. He noted that the lack of a higher court reversal means the current legal pronouncement stands. Chukwu also advocated for a shift towards true federalism to empower state governments and improve economic development in the country. Amid economic challenges exacerbated by the pandemic, he predicted more state governments would assert their fiscal autonomy to secure revenue streams. The conversation around economic federalism may extend to other areas like land ownership and security, according to Chukwu. On the topic of the Central Bank of Nigeria's digital currency initiative, Chukwu commended the move as a step towards enhancing financial inclusion. He highlighted the growing global trend of digital currencies and the potential benefits of adopting them in Nigeria's socio-economic landscape. However, he stressed the importance of effective implementation to achieve the desired objectives. Turning to the contentious issue of compulsory vaccinations, Chukwu criticized the government's stance on restricting access based on vaccination status. He raised concerns about the insufficient vaccine supply in Nigeria and pointed out the disparity between the vaccination rate and the population size. Chukwu suggested that the focus should be on improving vaccine availability before imposing vaccine mandates. He questioned the feasibility of enforcing restrictions without adequate vaccine procurement and distribution. The potential impact of the global spread of the virus on Nigeria's fragile economic recovery was also discussed. Chukwu acknowledged the possible negative repercussions on economic activities if the situation deteriorates. He highlighted the importance of effective vaccination campaigns to contain the virus and mitigate its economic consequences. Chukwu expressed optimism that aggressive vaccination efforts could help curb the spread of COVID-19 and prevent further disruptions to the economy. In conclusion, the ongoing legal battle over VAT collection, the introduction of digital currencies, and the debate on compulsory vaccinations reflect the complex challenges facing Nigeria amidst the persistent threat of the pandemic. The decisions made in these critical areas will not only shape the country's economic future but also impact the well-being of its citizens.