States Have No Valid Claim on VAT Collection, Malami Finally Declares

States Have No Valid Claim on VAT Collection, Malami Finally Declares

  • No Nigerian state has the power to lay claim to the collection of value-added tax (VAT) according to Abubakar Malami
  • The attorney-general of the federation insisted that the collection of VAT in the country is under the exclusive legislative list
  • Going further, Mr. Malami added that only the national assembly has the power to make laws on VAT

Abubakar Malami, attorney-general of the federation, says no state has the power to lay claim to the collection of value-added tax (VAT) in the country.

Malami said this on Friday, during an interview with Channels Television.

In recent weeks, the Federal Inland Revenue Service (FIRS) has been in a legal tussle over with Rivers and Lagos state governments over VAT collection.

However, some states have rallied in support of the FIRS.

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Collection of Value Added Tax by FIRS remains, says Malami

Amid the controversy, a court of appeal in Abuja ordered both Rivers and Lagos states to maintain the status quo over the collection of VAT.

Speaking on the development, Malami said the collection of VAT in the country is under the exclusive legislative list, adding that only the national assembly has the power to make laws on VAT.

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States have no valid claim on VAT collection, Malami says
Malami says states have no valid claim on VAT collection. Photo: Abubakar Malami
Source: Facebook

“A lot has precluded the state from collecting value-added tax. One, generally speaking, as you rightly know, the issue of the value-added tax is an issue on the exclusive legislative list,” Malami said.

“And the implication of being in exclusive legislative list matter is that only the national assembly can legislate on it. The question that you may perhaps wish to address your mind on is whether there exists any national legislation that has conferred the power on the state to collect VAT. And my answer is ‘no’.

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“In the absence of a law passed by the national assembly in that direction, no state can have a valid claim to collection of value-added tax.

“The responsibility, right and constitutional powers to legislate on collection of VAT is exclusively and constitutionally vested in the national assembly and not in the state.

“Where the national assembly has not passed any law in that regard authorising the state to collect VAT, then it goes without saying that no state can arrogate unto itself the powers to collect VAT.”

Malami added that it would amount to “recklessness” for any state to go ahead to collect VAT, despite the court’s decision asking parties to maintain the status quo.

“I don’t see any state perhaps taking the law unto its hands without allowing the judicial process to take its natural course and in breach of the prevailing legislation,” he said.

“I don’t see the states acting arbitrarily and setting a very bad precedence as far as governance is concerned with particular regard to the fact that the matter is receiving judicial determination.

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“I can’t understand. I can’t perhaps bring that thought into consideration that I believe it could amount to a high level of recklessness on the part of any state government to be operating in breach and to be operating a lawless governance style as far as the Nigerian state is concerned.”

Wike threatens showdown with FIRS

Governor Nyesom Wike of Rivers had earlier threatened to “take over” all offices of the FIRS in his domain if the federal government agency continues with its “bullying.”

The governor spoke at a stakeholders’ meeting in Port Harcourt, the state capital while addressing business owners in the state.

Wike instructed all business owners operating in the state to start remitting their VAT to the Rivers government starting from September 2021.

Lagos govt joins forces with Rivers in VAT battle against FIRS

Meanwhile, the Lagos state government on Friday, September 10, applied to the Court of Appeal in Abuja to be joined as a co-respondent in the appeal filed by FIRS against Rivers state.

Read also

VAT collection: Governor Akeredolu makes bold statements that will annoy some politicians

The FIRS is challenging the judgment of the Federal High Court, Port Harcourt, which held that Rivers state has the power to collect VAT within its domain.

The Attorney General of Lagos, Moyosore Onigbanjo (SAN), informed the court of the state's interest to be joined as a party in the appeal.

Source: Legit

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