Prof. Isaac Adewole, a former Health Minister, has called for fiscal federalism, where states receive funds commensurate with their contributions to the federation account.
Adewole made this statement on Channels Television’s “Inside Sources” program, emphasizing the need for states to be allowed to grow based on their internal resources.
He specifically argued that states that prohibit the sale of alcoholic drinks should not receive Value Added Tax (VAT) on beer through the federation account. “If you have a law that prevents you from selling alcohol, that law should also prevent you from sharing money from alcohol,” Adewole said.
Currently, many northern states where Sharia law is practiced forbid the sale of alcohol, and some have established religious police, known as Hisbah, to enforce the ban.
In 2021, there were talks about states collecting 7.5% VAT on beer, including other goods, with Rivers and Lagos states leading the move. However, the issue was challenged in court, and an appellate court ordered the states to maintain the status quo.
Adewole’s advocacy for fiscal federalism and his stance on VAT on beer has sparked debate on the need for restructuring and resource control by sub-nationals.
His call for states to be allowed to function independently and contribute to the federation account based on their internal resources has resonated with many who believe in the principles of federalism.
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