Tax war: Malami mulls challenging states at supreme court over VAT collection

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The federal government will do everything legally possible, including approaching the Supreme Court, to ward off states’ agitation for collection of Value Added Tax (VAT), Abubakar Malami, attorney-general of the federation (AGF), declared on Wednesday.

Malami dropped this hint while speaking to state house correspondents after the federal executive council (FEC) meeting on Wednesday.

Over the past weeks, the Federal Inland Revenue Service (FIRS) and some state governments have been in a legal tussle over VAT collection.

He said, “On the issue of VAT, as you rightly know, there were certain judgments obtained by some state governors at their jurisdiction and localities before their respective state high courts, and arising from those judgments and the laws that were passed by those state governments, the federal government filed an appeal against the judgement challenging the laws that were put in place, which I feel has been determined by the court of appeal,” he said.

“The court of appeal has granted an order of stay of execution, directing these state governments to maintain status quo pending the determination of the main appeal and these matters are being considered for determination.

“And some other governors have filed in an application for joinder, seeking to be joined in the matter as interested parties. But again, there is pending, equally, an application and preliminary objection for that matter, challenging the competence of the action and indeed the judgement that was obtained.

“But the federal government is still looking at other possibilities, all options open, in terms of challenging the action, the action of the state governments.

“But one thing that is fundamental that you need to know as being the issue equally being considered for determination by the court is the federal government is challenging the powers of the state governments to legislate on the issues associated with collection of VAT.

“And the position of the federal government as canvassed, which is being looked into by the judicial system, is to the effect that by our laws, the powers to legislate on the collection of VAT is statutorily vested in the national assembly. And with that in mind, it is not within the scope and powers of the state government to legislate on the issue of collection.

“So, what I’m saying in essence, is just to give an insight as to the multiple contentions between the parties as being determined, as being canvassed, presented for the determination of the court.

“And we are indeed litigating contending these issues before the court, and the federal government is looking at all options at its disposal, inclusive of the possibility of invoking the jurisdiction, the original jurisdiction of the supreme court, taking into consideration that the dispute at hand is a dispute between the state governments and the federal government, in respect of which only the supreme court has jurisdiction to entertain, taking into consideration the constitutional provisions relating thereto.

“So, this is the position we are in as far as contention among the parties relating to the value-added tax is concerned.”

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