As the controversy trailing the collection of Value Added Tax (VAT) unfolds with more twists, the Federal Government has moved to find a permanent resolution to the disputes by approaching the Supreme Court on its final determination, insisting that the Federal Inland Revenue Service (FIRS) will continue to collect the tax in the interim.
Following the ruling of the Court of Appeal on the matter two weeks ago ordering parties to the VAT dispute to “maintain status quo ante bellum,’ the Attorney-General of the Federation (AGF) and Minister of Justice, Abubakar Malami said that the ruling favoured FIRS.
He said it was FIRS that had been collecting the VAT before the dispute arose, over which the Rivers State government approached the High Court.
“The position of not only the Federal Government, but indeed the judiciary is the fact that status quo associated with the collection of VAT should be maintained,” Malami said.
It would be recalled that the Rivers State government had urged the Supreme Court to set aside the Court of Appeal’s September 10 ruling. A three-member panel of the Court of Appeal headed by Haruna Tsammani, issued the order being challenged by the Rivers government.
The state also urged the apex court to disband the panel of the appellate court, which gave the interim order and order another one to be constituted to hear the case.
“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 the Federal Government, it is the Supreme Court that should naturally have the jurisdiction to determine the dispute.
“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.
Also, the House of Representatives is considering a legislation that will back states to collect VAT and as well control the resources domiciled in their place.
The bill is titled ‘An Act to Alter 39, Part 1 of the Second Schedule of the 1999 Constitution as Amended to Substitute and Move the Item from the Exclusive Legislative List to the Concurrent Legislative List’, which is co-sponsored by Hassan Usman Sokodabo and John Dyegh.
The bill stipulates that: “The Constitution of the Federal Republic of Nigeria, 1999, is hereby altered as set out in Item 39, part 1 of the Second Schedule of the Principal Act, altered by substituting the item and moving it from the Exclusive Legislative List, to the Concurrent List.
“Thus, item 39, Part 1 of the Second Schedule of the Constitution to be moved to the Concurrent Legislative List now to read: States Government shall manage their resources, mines and minerals, including oil fields, oil mining, Value Added Tax (VAT), geological surveys as well as natural gas.
“Fifty per cent of the total revenue accruable from the minerals shall be retained by the state where the minerals are derived. Thirty per cent shall be credited to the Distributable Pool Account, while the remaining 20 per cent shall be credited to the Federation Account.”
This development is set to upturn the applecart, as it will further strengthen the states in its dispute with the Federal Government, already being spearheaded by Rivers and Lagos.
As the controversy rages with court litigations, a source disclosed that governors in support of states collecting the revenue are behind the latest move by lawmakers to back the states.
“Of course, the governors have representatives at the National Assembly, so what is wrong with them asking their lawmakers to back them up in their quest for self sustainability,” a source who craved anonymity said last night.
