Home News Uncertainty over Fed Govt’s directive on VAT collection

Uncertainty over Fed Govt’s directive on VAT collection


Rivers State has urged the Court of Appeal to order the appointment of a receiver/manager over VAT pending the determination of an appeal by the Federal Inland Revenue Service (FIRS) against the Federal High Court judgment empowering states to collect VAT.

Lagos has also prayed the appellate court to stop the FIRS from further sharing the revenue to states until the case is determined in order to preserve the res (subject-matter).

The Court of Appeal directed the parties to file formal applications on their requests.

Ahead of yesterday’s deadline for August VAT remittance, the Organised Private Sector of Nigeria (OPS) urged the Federal Government to clarify the confusion on who businesses should pay to.

On Monday, the Attorney-General of the Federation Abubakar Malami (SAN), through his spokesman Dr Umar Gwandu, said VAT should be remitted to the FIRS in line with the Court of Appeal order that status quo antebellum be maintained.

Rivers is at the Supreme Court to challenging the status quo order.

Lagos State government yesterday said it was “not satisfied” with the AGF’s position.

Responding to an enquiry, Commissioner for Information and Strategy Gbenga Omotoso, told The Nation: “Satisfied? No. We are studying the situation and we will react appropriately.”

The Manufacturers Association of Nigeria (MAN) Director-General, Mr Segun Ajaiyi-Kadir, said members would continue to abide by the status quo by remitting to the FIRS as ordered.

“Based on feedback from our executive secretaries, status quo is still the case.

“Lagos State Government has not started demanding that our members remit VAT to it based on the judgment by a Federal High Court in Port Harcourt, Rivers State, which held that the Federal Government lacked constitutional power to collect VAT.”

Ondo State Governor Oluwarotimi Akeredolu said VAT collection by states was the way to go.

Read Also: VAT row: Fed Govt directs remittance by firms to FIRS
He said though the state would be affected if FIRS is stopped from collecting and sharing VAT, the right thing should be done.

Ondo Commissioner for Information, Donald Ojogo, said: “On the part of Ondo state, it is an act of statesmanship and a phenomenal show of altruistic posture for the governor to pursue this course.

“For the records, Ondo is one of the states that will be likely affected by the consequence of the push for collection of VAT by states.

“Like those states in its category, Ondo generates less and collects more; yet, not minding that we will suffer some effects, we support and stand by Rivers and Lagos. This is true fiscal federalism berthing.”

But, the Gombe State Governor, Muhammadu Inuwa Yahaya, berated those he said were accusing the North of being a parasite.

He spoke after signing a Memorandum of Understanding MOU for exploration of oil and gas in the Kolmani oilfield in the state.

Yahaya said the exploration of the oilfield has become imperative with the clamour by some states to collect and retain the Value Added Tax, VAT.

The MoU was signed with Rift Oil and Petroleum Company.

The governor said: “I am not happy when some elements consider the North as parasite despite the abundant minerals in the region.

“The reason for this is lack of political will to explore the abundant mineral resources in the state for the benefit of the people on the part of previous administrations.

“The need for us to explore and get the maximum benefit from our God-given natural endowments is imperative now having realised how much ground we have lost in that direction.”

Also yesterday, Kaduna State Governor Nasir El-Rufai said Nigerians must not confuse VAT with sales tax.

He said the Nigerian Governors’ Forum (NGF) would soon take a position on the controversy surrounding the collection of the tax after the Supreme Court pronouncement.

El-Rufai spoke with reporters after a visit to the National Secretariat of the All Progressives Congress (APC) in Abuja.

He said: “We took a position in the Nigeria Governors Forum not to comment on the VAT issue because it is still going through the court.

“Until the Supreme Court makes a final pronouncement on the matter, anything that you say today can be changed.

“Even the states that have passed legislation, the Supreme Court can override them. So, I am reluctant to comment on it.

“But people think that VAT is a sales tax. It is not. VAT is a special kind of tax. And there are many ways to look at it and I am sure that at the appropriate time, the Nigeria Governors Forum will look at it and take a position.

“But until then, I am reluctant to comment on a matter that is still going through the judicial process.”


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