The Lagos State Government said on Wednesday that a letter written by the Federal Inland Revenue Service (FIRS) to the National Assembly seeking inclusion of Value Added Tax (VAT) on the exclusive legislative list would not stop the bill on the tax currently before the state House of Assembly.
The FIRS, in a bid to retain the collection of the tax, wrote to the National Assembly to seek the inclusion of VAT collection in the exclusive legislative list.
Last month, the Federal High Court sitting in Port Harcourt, in a judgment in suit number FHC/PH/CS/149/2020, held that the Rivers State Government had the powers to collect VAT within its territory.
Although the FIRS applied to the court for a stay of execution, Justice Stephen Pam rejected the application, saying granting it would negate the principle of equity.
The VAT crisis took a different dimension on Monday when a bill to empower the Lagos State Government to collect the tax scaled the second reading in the state House of Assembly.
On Tuesday, the Akwa Ibom State House of Assembly said it would soon start work on a bill to enable the state government to collect VAT.
On Wednesday, a letter written by the FIRS to the National Assembly on the matter was obtained by one of our correspondents.
The letter, signed by the Executive Chairman of the FIRS, Muhammad Nami, and dated July 1, 2021, was addressed to the Chairman of the House Constitution Review Committee, who is also the Deputy Speaker of the House of Representatives, Idris Wase.
The letter, with reference number FIRS/EC/CWREP/0416/21/037, which was received by Wase’s office on July 2, was titled, ‘Request for sponsorship of a bill for the establishment of the proposed Federal Revenue Court of Nigeria and the insertion of Value Added Tax under item 58 of the exclusive legislative list’.
The federal tax agency specifically pleaded with the legislature to vest exclusively in it all adjudication of tax disputes, including federal tax laws, Companies Income Tax, Petroleum Tax, Income Tax, Capital Gain Tax, Stamp Duty, VAT, taxes, levies and other laws, regulations, proclamations, government notices and rules.
The letter read in part, “The Federal Inland Revenue Service further proposes the amendment of Section 251 (1) (b) of the Constitution of the FRN, 1999 (amended) by removing the exclusive jurisdiction of the Federal High Court only on anything connected or related to federal tax matters since same would be vested in the proposed federal revenue court.
“The Federal Inland Revenue Service also proposes the insertion of Value Added Tax immediately after Stamp Duties under item 58, part II of the 2nd schedule of the 1999 Constitution of the FRN.
“The Federal Inland Revenue Service appreciates the maximum cooperation and support we are receiving from your good office on tax matters generally.
“This has boosted our morale and determination to do more for the government in tax revenue generation.
“The FIRS therefore wishes to further request that the House of Representatives consider the request for the establishment of the Federal Revenue Court. “
Meanwhile, the Lagos State Commissioner for Information and Strategy, Mr Gbenga Omotoso, said the state would go ahead with its VAT bill irrespective of the action of the FIRS.
Omotoso, in an interview with one of our correspondents on Wednesday, said the state had the right to make laws that would help it to govern the people.
He said, “The FIRS has a right to write to the National Assembly to seek some concession in whatever aspect of any law it deems necessary; it is a right that nobody can take away from it; states also have a right to formulate laws that they think will help them in the business of government.
“As far as this revenue allocation matter is concerned, Lagos State has taken some steps that will further enhance its stability to go along the line that it recognises as a right in this debate over VAT.
“The process that the state government has started, there is nothing there that will make it reconsider it. The bill has been sent to the state House of Assembly and the House is already considering the bill. Irrespective of whatever the FIRS is doing, the Lagos State Government is not going to fold its hands and miss the opportunity for us to push the argument for true fiscal federalism forward.” – Punch.
