VAT Collection: Appeal Court stops Lagos, Rivers, others




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…..Gombe governor: Court ruling in order, will prevent multiple charges

…..I’ll embrace any court decision on VAT, says Ortom.

Sanwo-Olu signs VAT Bill into law.


Abuja – The Court Appeal in Abuja on Friday ordered parties in the dispute over the administration of the Value Added Tax (VAT) to stay action pending the resolution of all legal issues in contention.

A three-member panel of the court ordered parties to maintain status quo ante bellum and refrain from acts capable of jeopardizing the res (subject of the dispute).

The court agreed with the lawyer to the Federal Inland Revenue Service (FIRS), Mahmud Magaji (SAN) that, having submitted to its (the court’s) jurisdiction, it was incumbent on parties to preserve the res.

Justice Haruna Simon Tsanami, in the lead ruling, ordered parties not to give effect to the August 9 judgment of the Federal High Court in Port Harcourt and the VAT law enacted by Rivers State.

The court ordered parties to hold their peace pending the hearing of the application filed by the FIRS for stay of execution of the judgment given by Justice Steven Pam in favour of Rivers State to collect VAT in the state.

The court equally granted leave to the Lagos State Government to bring an application to be heard in the case as an interested party in the appeal filed by FIRS against the Federal High Court judgment.

It noted that Lagos State’s right would be adversely affected if not heard.

The court then adjourned till September 16 for the hearing of pending applications, including the joinder application by Lagos.

In his August 9 judgement in a filed by the Rivers State government,Justice Stephen Pam of the Federal High Court, Port Harcourt, had held that the applicant (state government) and not the FIRS, has the right to collect VAT, Personal Income Tax in the state.

He restrained the Attorney General of the Federation (AGF) and FIRS (1st and 2nd defendants) from collecting VAT in Rivers and directed the Rivers State government to take charge of the duty.

The Lagos State House of Assembly soon followed and passed a similar law empowering the state government to collect VAT in the state.

Sanwo-Olu signs VAT Bill into law
The Court of Appeal’s order came on a day Babajide Sanwo-Olu of Lagos State signed into law the state VAT Bill as passed by the House of Assembly.

The signed the “bill for a law to impose and charge VAT on certain goods and services” at about 11.45am soon after returning from an official trip to Abuja .

Kogis blasts ‘insensitive, self-centred leaders trying to further divide the country’
But the action of the Lagos and Rivers State governors on the VAT issue seems not to have gone down well with the Kogi State government which, yesterday,said the states should support one another.

Information Commissioner, Kingsley Fanwo, said the agitation for states’ control of VAT was the handiwork of those he called insensitive and self-centred leaders.

“We are not created equally, and God that created us did not give us equal potential, and we have to support one another,” Fanwo said on Arise TV.

He added: “This call shows that some of our leaders are insensitive, self-centred and trying to make policies that will further divide the country.

“Kogi is bordered by about 10 states of the federation and a gateway to the North, South, to everywhere. And you know that thousands of vehicles transverse the state on a daily basis. It’s the mineral capital of Nigeria. When you look at our advantages, we should even be at the forefront of fighting for VAT to be completely retained in the state.

“When you look at the development of the South-West in those days,the Cocoa House,and the groundnut pyramids in the North, the whole of Nigeria is reaping the benefit till today. And what we need to do at this material time as leaders is to stop thinking about ourselves alone.

“The position of Yahaya Bello (of Kogi State) on this is very clear: we will not jump on that bandwagon to call for the retention of VAT completely in the state.”

Gombe lauds ruling
Gombe State governor, Inuwa Yahaya, yesterday welcomed the Appeal Court’s ruling on maintaining status quo on VAT collection and distribution.

Yahaya, speaking through his Director General, Press Affairs, Malama Ismaila Uba Misili said his state still prefers the central collection and distribution of VAT.

“The position of Gombe State is the need to retain the existing collection and distribution of VAT centrally. This is to ensure a balance in the collection and refund system that ensures customers are not charged multiple times,” he said.

Ortom: We’ll obey court’s decision no matter its leaning
But Samuel Ortom of Benue has said he would embrace the constitutional provisions concerning the Value Added Tax (VAT) whether they affect his state positively or negatively.

Ortom who commended the Rivers and Lagos States governors for the step they have taken on the VAT issue said he had directed the Benue Attorney-General and Commissioner for Justice to study the law and tell him its implication.

“I don’t think there is anything wrong in embracing the law as long as it conforms with the constitution, whether it affects states positively or negatively,” Ortom told reporters in Makurdi on his return from Abuja.

“I support the governors of Rivers and Lagos states for what they are doing.

“Anything that is in tandem with the rule of law I will accept, but if anyone thinks otherwise, the best thing to do is to go to court.

“I heard they are in court and if the case is decided otherwise by the Supreme Court we will accept it.”

Speaking on the 2023 elections, the said zoning of political offices by political parties goes a long way in determining their victory or failure.

The said that he was confident that his party, the Peoples Democratic Party (PDP) would get it right and win the 2023 election overwhelmingly to once again rule Nigeria.

He said that the party was repositioned to give Nigerians the needed freedom they desired, considering what was happening in the country recently.

“There is nothing the APC didn’t promise Nigerians in 2015, I was there but immediately they assumed leadership they did not keep to their promises.

“By October, we will hold our national convention in preparation for the 2023 elections and I believe this time we will get it right.”

On the incessant clashes between herders and farmers in the country,Ortom said farmers should be allowed to bear AK 47 rifles like herdsmen so that they can defend themselves.

Ortom said a situation whereby herdsmen go about with sophisticated weapons like AK 47 and farmers are asked to defend themselves with only cutlass and dane guns is unfair .

“Farmers should be allowed to carry weapons commensurate with the weapons herdsmen are carrying about and killing people with .

“Let everyone have weapons so that we can face each other ,not when you have cutlass and dane guns to face someone with an AK 47,” he said.

Katsina thumbs up court ruling; Rivers declines comment
Katsina State also welcomed the Appeal Court on the ruling with Finance and Economic Development Commissioner, Qassim Mutallab, saying that allowing states to collect VAT would distort the national economy, breed multiple taxation and undermine the Federal Government’s policy on doing business with ease.

“If you allow the states to collect VAT, it will encourage multiple taxation on telecommunication companies, banks, and corporate entities with national spread,” Mutallab said by phone.

He added: ”It will encourage every state with different tax rates, demanding different payments from the same company and who pays the companies these differences?”

The Attorney-General of Rivers State and Commissioner for Justice, Prof. Zacchaeus Adangor declined to comment when contacted by The Nation yesterday.(PUNCH).