Saraki-led Senate approves 3 per cent VAT for northeast rebuilding
Saraki-led Senate approves 3 per cent VAT for northeast rebuilding

Nigerian Senate has approved the allocation of three per cent of Value Added Tax (VAT) accruable to the Federal Government in the next 10 years for the rebuilding of the North-East.

This was sequel to the adoption of the recommendation of the Ad hoc Committee on North-East Development Commission Bill. The recommendation also proposed that the commission be domiciled in Borno.

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When the Bill came for third reading in June, two issues stalled its consideration. The issues are allocation and headquarters of the commission.

The Committee on Special Duties had proposed that the commission’s headquarters be located in Abuja but Sen. Ali Wakil insisted that it should be sited in Bauchi.

Other senators from North-East states of Gombe and Borno, who also deferred, insisted that the commission headquarters be located in their own states.

Another contentious issue which the senators kicked against was the deduction of state allocation to fund the commission. The bill proposed the deduction of 15 per cent of federal allocation to every state of the region at source to fund the commission.

The proposal that 50 per cent of ecological fund meant for each of the six North-East states should be deducted at source for the funding of the commission was also rejected by the lawmakers.

Disagreements over contentious issues in the bill

The upper chamber suspended the clause-b- clause consideration of bill due to disagreements. The senate therefore set up a committee to look into the contending issues.

During plenary on Thursday, the lawmakers also agreed with the ad hoc committee on duration the commission will run. They agreed on the 10 years proposed by the proposed bill.

Presenting the report of the committee, its Chairman, Sen. Sam Egwu, said that the committee agreed with all other funding arrangements proposed by the bill.

“The committee reviewed and agreed with the proposed bill’s funding arrangement. The only contentious area was the aspect that sought five per cent of the Federal VAT without a time frame.

“Consequently, the committee reviewed the amount to five per cent of the Federal VAT for the period of 10 years that will serve as intervention from the Federal Government,” he said.

The funding of the commission will also include 15 per cent of allocation to the six North-East states.

Also forming part of the funding is a 50 per cent deduction of the ecological fund due to the six North East states.

After adopting the recommendations, the Senate referred the Bill to the Committee on Special Duties chaired by Sen. Murtala Nyako.

The committee is to effect the changes in the area of funding and location of the commission. The committee will consequently bring the Bill back for final passage (Third Reading).