Ex-Minister: States Banning Alcohol Shouldn’t Receive VAT on Beer

Former Health Minister, Prof Isaac Adewole, has proposed the implementation of fiscal federalism, suggesting that states should receive funds proportional to their contributions to the federation account.

Adewole, a former Vice Chancellor of the University of Ibadan, shared his views on Inside Sources with Laolu Akande, a socio-political program.

He emphasized the importance of allowing local government areas to operate as an independent tier of government and supported the ongoing calls for restructuring and resource control by sub-national entities. Adewole expressed his advocacy for both fiscal and physical federalism.

While acknowledging that a return to regionalism may no longer be feasible, he stressed the need for states to develop autonomously based on their available resources. Adewole highlighted the issue of states that restrict the sale of alcoholic beverages benefiting from Value Added Tax (VAT) revenue generated from such products.

He emphasized the importance of transparency in resource allocation, suggesting that states should be accountable for their contributions. Adewole questioned the reliance on oil revenue alone, urging states to explore and utilize other natural resources like gold, bitumen, and lithium.

The discussion also touched on the prohibition of alcohol sales in several northern states due to Sharia law, leading to the establishment of religious police to enforce the ban. In 2021, there were talks regarding the collection of 7.5% VAT on goods, including alcohol, by state governments.