SHARIA LAW AND ALCOHOL DRINKING: Matters Arising

Borno state government on 13^th of January 2017 announced a ban on the consumption of all forms of alcoholic drinks, joining a list of Northern states that has done the same in Nigeria. The list includes states like Kano state, Kastina state, Jigawa state, Niger state, Sokoto state, Zamfara state and Yobe state.

The ban is being enforced in the state, probably as a result of the trappings of Sharia law which is in force in the Northern part of the country. This ban affects the consumption of all forms of alcoholic drinks like Beer, Gin (Local and Foreign), Scotch, Vodka, Rum and all forms of Alcoholic bitters.

The perceived benefits of such a ban might be seen in the reduction of vices which are the indirect result of alcoholism; but before you start nodding in agreement, let’s consider the economic consequences of such a ban.

It is clear that one of the biggest sources of government income aside oil revenue is TAX and the highest source of Tax income is VAT (Value Added Tax) for instance, in the first quarter of 2016 alone, the sum of N198.73 billion was gotten from VAT.

Value added tax as has been discussed in a previous post on this blog, is the amount paid by various companies to the Federal Government of Nigeria from the amount they receive from sale of their product or for services rendered. It is calculated as 5% of total income made from sales.

See http://ijeomaudechukwu.blogspot.com.ng/2016/03/this-might-be-reason-why-that-100-naira.html for a full description of VAT.

Bear in mind that this money from VAT goes direct to the Federal government purse and this money forms part of the revenue shared by the Federal government to the 36 states of the federation in form of revenue allocation. The higher the amount received by the federal government, the higher the amount shared by all the states in Nigeria. Though VAT is not the only source revenue shared to states but it forms a significant part of the revenue to the government, which also includes revenue from oil.

Considering the amount of money made from the sales of alcohol in the country one would begin to get a clearer picture of how much government is making from VAT on alcohol. The easiest way to see this income is to consider that for every single bottle of alcohol one pays for, the government takes 5% of that amount. Now multiply this 5% by the numerous numbers of bottles taken in the country every day and then we begin to see how much government is making from the sale of alcohol.

The problem here is that though this money gotten by the government is shared to all the 36 states of the federation, not all 36 states of the federation contributes to this VAT on alcohol revenue. While some northern states are busy banning alcohol, they are still getting their share from its revenue. It is clear that without this ban by northern states, the VAT revenue from alcohol will be more, rather they ban alcohol intake and still share from the much, other states are getting from alcohol. 

The principle of equity would require that if a state prohibits the patronage of a product, then revenue form it should be prohibited as well. Since it is the sharia law sees alcohol intake as sinful, then taking money gotten from such sinful means should be even more sinful.

Or

What do you think?