The states that think that they generate high VAT revenue should not be quick to celebrate yet.

VAT is a sales Tax. Companies will pay VAT to states in proportion with the value of their goods and services consumed in such states.

Under FIRS, the major MNCs paid their VATs at their corporate head offices which were mainly located at Lagos and PHC. The value of sales of their products in different states was inconsequential since the VAT proceeds was shared across all states.

But with this new regime, Enugu state will charge NBL for all beers distributed in Enugu.
Ekiti state will demand VAT from MTN and DSTV on all sales made in Ekiti.

No state will accept input VAT from other states.

Again I forsee a situation whereby some companies may relocate their corporate head offices to the owner's state of origin as a solidarity move.
For instance, we all know that not all the promoters of local major companies are from Lagos state.
I see a situation whereby state Governors will create incentives to attract their indigenous industralists to relocate their corporate head offices to their home states so as to help grow their states.

Nothing changes, company would always do their quarterly audit at their headquarters and every tax shall be filled at the corporate headquarters, they use central account, central auditing firm and central tax consultant

SouthEast with little or no corporate headquarters won't still get any spike in VAT, except your Governors and Ipob start making SouthEast Investors friendly

mynextLevel:
The states that think that they generate high VAT revenue should not be quick to celebrate yet.

VAT is a sales Tax. Companies will pay VAT to states in proportion with the value of their goods and services consumed in such states.

Under FIRS, the major MNCs paid their VATs at their corporate head offices which were mainly located at Lagos and PHC. The value of sales of their products in different states was inconsequential since the VAT proceeds was shared across all states.

But with this new regime, Enugu state will charge NBL for all beers distributed in Enugu.
Ekiti state will demand VAT from MTN and DSTV on all sales made in Ekiti.

No state will accept input VAT from other states.

Again I forsee a situation whereby some companies may relocate their corporate head offices to the owner's state of origin as a solidarity move.
For instance, we all know that not all the promoters of local major companies are from Lagos state.
I see a situation whereby state Governors will create incentives to attract their indigenous industralists to relocate their corporate head offices to their home states so as to help grow their states.

Is it today u knew that Governor’s are supposed to create incentives to attract industrialists?

Jerryherd:
Nothing changes, company would always do their quarterly audit at their headquarters and every tax shall be filled at the corporate headquarters, they use central account, central auditing firm and central tax consultant

SouthEast with little or no corporate headquarters won't still get any spike in VAT, except your Governors and Ipob start making SouthEast Investors friendly

You are wrong ... VAT is collected at sales point not production point

It was called at production or entry point because fedral government collected it n it was shared but now it would be different...most companies won't be charge for VAT anymore even ...it's retail outlets that would be the major VAT collector

And since things are generally more expensive in south east the higher the VAT

mrvitalis:

You are wrong ... VAT is collected at sales point not production point

It was called at production or entry point because fedral government collected it n it was shared but now it would be different...most companies won't be charge for VAT anymore even ...it's retail outlets that would be the major VAT collector

And since things are generally more expensive in south east the higher the VAT

As much as consumption tax like VAT are charged at sales point, remittance to the Government is done quarterly at the corporate headquarters using sales metrics audited... So if you get charged 3000 naira VAT at Obi Cubana's night club in Imo State, your 3000 is paid at Obi Cubana's group of companies head office registered in Abuja

If you go to any ShopRite outlet in the east and pay VAT remittance to the Government would still happen at the corporate headquarters

You guys should let us rest with all your emotional write up to blackmail Lagos. Companies don’t do business based on emotions. So, why will a company move its business out of Lagos because of VAT law? Was the business located in Lagos in the first place because of VAT law?

Enough of all this abed. Let’s all wait for the Supreme Court to settle the matter. If the final decision is in favour of the states, a JTB will come up with a workable template that will allow for a smooth implementation of the new VAT regime. Collection of PAYE as been overlapping among states for years and it is not an impediment to the administration of personal income tax. Same will be applied to VAT and all grey areas shall be resolved. Head or tail, Lagos will be the biggest beneficiary if this decision is sustained.

Jerryherd:


As much as consumption tax like VAT are charged at sales point, remittance to the Government is done quarterly at the corporate headquarters using sales metrics audited... So if you get charged 3000 naira VAT at Obi Cubana's night club in Imo State, your 3000 is paid at Obi Cubana's group of companies head office registered in Abuja

If you go to any ShopRite outlet in the east and pay VAT remittance to the Government would still happen at the corporate headquarters

That's a big lie ...it only happens now because they are collected at the center

Now each state would collect theirs simple

It's similar to USA sales tax