VAT row: FG mulls dragging Rivers, Lagos to Supreme Court | Dailytrust

VAT row: FG mulls dragging Rivers, Lagos to Supreme Court

Justice Abubakar Malami (SAN)
Justice Abubakar Malami (SAN)

The Federal Government has said it is considering the possibility of filing a suit at the Supreme court to resolve the tussle over the collection of Value Added Tax.

The Attorney-General of the Federation and Minister of Justice, Abubakar Malami, told the News Agency of Nigeria (NAN) in New York while speaking on the disagreement over the collection of VAT between FIRS and Rivers Government.

The Rivers and Lagos State Governments had promulgated laws seeking decentralisation of VAT collection.

The Rivers government had urged the Supreme Court to set aside the Court of Appeal’s Sept. 10 ruling ordering it and FIRS to maintain the status quo on the issue of VAT collection.

A three-member panel of the Court of Appeal, headed by Haruna Tsammani, issued the order being challenged at the Supreme Court by the Rivers government.

But Malami said the Federal Inland Revenue Service (FIRS) would continue to collect Value Added Tax (VAT) following the ruling of the Court of Appeal on the matter.

He said the ruling of the Court of Appeal that FIRS and the Rivers Government maintain status quo, favoured FIRS.

He noted that it was the FIRS that had been collecting the VAT before the dispute arose over which the Rivers government approached the High Court.

“This is pending the determination of the cases that were instituted by states, particularly the Rivers State Government and the Lagos State government. The cases are being determined by the court.

“But one thing of interest is the fact that the Federal Government had indeed taken cognisance of the fact that where there exists a dispute between a State and Federal Government, it is the Supreme Court that should naturally have the jurisdiction to determine the dispute between the state and the federation.

“And we are taking steps to consider the possibility of instituting an action before the Supreme Court for the purpose of having this matter determined once and for all,’’ Malami said.

In a swift reaction to the AGF, The Lagos State Commissioner for Information and Strategy, Mr Gbenga Omotoso said that the state government is not averse to the Federal Government going to court.

He said:  “All we are saying is about equity, fairness and justice. It is not a personal battle for us in Lagos. It is not only about what Lagos will gain at the long run but about what Nigeria will gain. Since the Federal Capital left Lagos in 1991, the State has been like an orphan,”

“It is the smallest State yet carries the burden of so many. All ethnic groups are represented in Lagos. Over 80percent of goods imported into Nigeria come through Lagos Port; over 70percent of foreign traffic to Nigeria comes through Lagos while the State also records more than 70percent of Nigeria’s vehicular traffic, despite its small landmass. The volume of air, sea and road transport activities in Lagos puts pressure on the State’s infrastructure,”

VAT not in item 58 and 59 of 1999 constitution — Wike

Rivers State Governor, Nyesom Wike said that VAT is not in item 58 and 59 of the second schedule of the 1999 constitution as was amended.

Governor Wike who spoke when he hosted management of a national newspaper in Port Harcourt said VAT is not in the concurrent list but falls under the residual list.

“You don’t even need to be a lawyer to know that VAT is not in item 58 and 59 of the second schedule of the 1999 Constitution as amended. Everybody knows that. It is not even in the concurrent list. Therefore, it falls under the residual list. It is not arguable. That yesterday nothing happens does not mean that today nothing will happen, or tomorrow something will not happen.

He explained that the contest against the collection of the Valued Added Tax (VAT) was started by Lagos State which had sued the Federal Government at the Supreme Court. According to him, Rivers State only avoided their pitfall by suing the Federal Inland Revenue Service, FIRS, which is an agency of the Federal Government, that was illegally collecting the tax in the State.

By Sunday Michael Ogwu( Abuja) Christiana T. Alabi (Lagos)Victor Edozie (Port Harcourt) & Agency report