By Ishola Adeleke and Okereke Udoakpuenyi, YeyeNews.com, October 6, 2021
As the controversy over VAT collection escalates to the Supreme Court, the Osun State government is already considering different proposals for coping with possible scenarios. One of such proposals the state government is considering is a possible merger with neighboring Oyo State if the outcome of the litigations happen to be in favor of State governments, YeyeNews.com has learned.
A source in the governor’s office told YeyeNews.com reporter that the government realized that with the revenue shortfall that will follow if the courts decide that states should collect VAT Osun State will not be able to meet basic obligations. “Osun is a financially challenged state. We have the lowest VAT contribution in the Southwest. We receive over 10 times from the shared VAT from the federal government than what we contribute to the pool. So if this source of fund is taken away, it will seriously affect our sustenance”, the Commissioner for Finance told YeyeNews.com.
A financial analyst with a major accounting firm informed YeyeNews.com reporter that the path Osun State is taking is the right one. “I urge every other low revenue state to begin to consider the future of this current set up which is definitely unsustainable as it is. Many of our states must start considering the possibility of merging. This feeding bottle may be yanked off their mouth sooner than expected”.
Meanwhile, an official of Oyo State confirmed that the state government will welcome such initiative despite the fact that the political will is not there currently. “When the time comes we shall be in the forefront of the push to amend the constitution to allow merger of some contiguous states. We should forge into a single unit like we were under the defunct western region. This should not be about politics but the betterment of our region and people. I commend Osun for thinking in this direction”.
“This should be what we should be discussing nationally. It is not about Osun State alone but about the viability of the country as a whole. You will be shocked to know that as low as their VAT and other revenues are, Osun still generates more than some states. But most of those other states want to forever maintain this feeding bottle system forgetting that at some point they just have to disengage from the bottle and fend for themselves”, a public affairs analyst Olaide Pedro told YeyeNews.com reporter.
