PIA Will Shorten Monthly Allocation to States—Wike

August 23, 2021
Monthly Allocation to States

By Adedapo Adesanya

The Governor of Rivers State, Mr Nyesom Wike, has criticised the newly signed Petroleum Industry Act (PIA), claiming it will reduce remittances by the Nigerian National Petroleum Corporation (NNPC) to the federation account, thereby slicing the monthly allocation to states.

The Governor made this disclosure while speaking at the Government House, Port Harcourt, last week shortly after signing into law the Valued Added Tax Law No. 4 of 2021, which authorises the Rivers State Government to henceforth collect Value Added Tax (VAT) in the state.

He explained that the NNPC under the new Act, will be unbundled and this will lead to every state having to look inward to survive without waiting for the federal government’s Federation Accounts Allocation Committee (FAAC) allocations.

He said, “With the Petroleum Industry Act passed and signed into law, there shall be unbundling of NNPC, which means that NNPC remittance to the federation account will be less, requiring every state to look inwards on how to survive.”

He said that over the years, states have become weak that they could barely survive without monthly revenue received from the allocation.

Alluding to the recent drama with the Federal Inland Revenue Services (FIRS), he pointed out that when agencies of the central government are allowed to demand and collect taxes meant for states to collect, they have to resort to “begging”

“Of course, we are all aware that the states have already been strangulated. Most states depend on allocation from the federation account. States have been turned to beggars.

“Hardly will any day pass that you won’t see one state or the other going to Abuja to beg for one fund or the other.

“In this (Rivers) state, we awarded contracts to companies and within the last month, we paid over N30 billion to the contractors and 7.5 per cent will now be deducted from that and to be given to FIRS.

“Now, look at 7.5 per cent of N30 billion of contracts we awarded to companies in Rivers State, you will be talking about almost N3 billion only from that source.

“Now, at the end of the month, the Rivers State government has never received more than N2 billion from VAT. So, I have contributed more through the award of contract and you are giving me less. What’s the justification for it?” he questioned.

Speaking further, Governor Wike said there were plans already for FIRS to introduce road tax and this was likely to take away more duties from the states and further emasculate them financially.

“Which are the roads? Are they the roads the state government is paying for or the roads the federal government has constructed? So, at the end of the day, they have taken over the functions of the state government and the state is left with nothing,” he lamented.

Adedapo Adesanya

Adedapo Adesanya is a journalist, polymath, and connoisseur of everything art. When he is not writing, he has his nose buried in one of the many books or articles he has bookmarked or simply listening to good music with a bottle of beer or wine. He supports the greatest club in the world, Manchester United F.C.

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