Excerpts: The other side of VAT debate: Unfair to the North… By Temitope Ajayi

Health Reports


“How fair is the argument that a section of the country is parasitic or not contributing to the VAT pool? The northern states are the usual boogeyman when this point of parasites comes up. The north is the major agricultural production belt of the country but VAT is not charged on agricultural produce to ensure food security and affordability for the people. The exemption of agricultural produce from VAT creates an unfair disadvantage for States that are predominantly food producers. They can’t charge VAT on their major source of income and yet we blame them for not being able to generate enough VAT and describe them as lazy when, in the real sense, they are more productive than southern states. According to the National Bureau of Statistics (NBS), the 2021 Q2 GDP figure showed that while crude oil only contributed 5.8% (N2.27 Trillion ) to the GDP, Agriculture recorded 22.1% (N8.6 Trillion) and manufacturing 14.3% (N5.55Trillion). Ironically, in the same period that Agriculture contributed almost N9trillion (22%) to the GDP, it only contributed N760M (0.2%) to VAT while crude oil GDP that contributed N2.2trillion (5.8%) contributed N9.5B in VAT (1.8%). This happened by a deliberate policy of the Federal Government that does not allow VAT on agricultural products.