*Say VAT collection is state’s responsibility
*Insist on Southern President in 2023
*Reaffirm commitment to structural, fiscal federalism
*We’ve legal right to collect VAT, Lagos govt insists; Appeal Court reserves ruling
*Panel declines to appoint neutral body to collect VAT in both states
*Stakeholders laud Ogun Assembly on VAT law
*Call for fairness in revenue sharing from FAAC
By Anayo Okoli, Regional Editor, South-East, Ikechukwu Nnochiri, Chinedu Adonu & James Ogunnaike
Southern governors yesterday rose from a meeting in Enugu, and threw their weight behind the clamour by some states to take control of collection of Value Added Tax, VAT, in their domains.
Consequently, the governors, acting under the aegis of Southern Governors’ Forum, supported efforts made so far by Rivers and Lagos states to ensure this was realisable.
It will be recalled that the two states are currently in court to wrest control of VAT collection from the Federal Government.
The governors also insisted on their earlier call that the country’s next president comes from the south in 2023, while also reiterating their clamour for true fiscal federalism.
The Southern governors’ position on VAT came on a day Lagos State Government, maintained in court that it has the constitutional right to collect Value Added Tax, VAT, and not the Federal Inland Revenue Service, FIRS.
This is even as Ogun State House of Assembly yesterday said the proposed State Value Added Tax Law, 2021 remains one of its legislative initiatives designed to achieve fiscal restructuring in the country to further ensure equity and fairness in revenue sharing among federating units.
‘States have constitutional powers to collect VAT’
Rising from the meeting in Enugu, the governors in a seven-paragraph communique read by chairman of Southern Governors’ Forum and governor of Ondo State, Rotimi Akeredolu, said since states have the constitutional powers to collect VAT, they should be allowed to do so without hindrance.
The communique read: “Nigerian Southern Governors’ Forum at its meeting of today (yesterday), Thursday, September 16, 2021, held in the Government House, Enugu, Enugu State, reviewed the state of the nation and the progress of implementation of the decisions reached in her previous meetings and further resolved as follows:
lExpressed satisfaction with the rate at which the states in Southern Nigeria are enacting or amending the Anti- Open Grazing Laws which align with the uniform template and aspirations of Southern Governors and encouraged states that are yet to enact this law to do so expeditiously.
lEncouraged the full operationalization of already agreed regional security outfits; which would meet, share intelligence and collaborate, to ensure the security and safety of the region.
lReaffirmed its earlier commitment to structural and fiscal federalism as resolved at the inaugural meeting of the Forum held on Tuesday, May 11, 2021, in Asaba, Delta State ,and emphasized the need for Southern states to leverage the legislative competence of their respective State Houses of Assembly as well as representation in the National Assembly to pursue its inclusion in the Nigerian Constitution through the ongoing constitutional amendment.
lFollowing from paragraph 3” above, the meeting resolved to support the position that the collection of VAT falls within the powers of the states.
lExpressed satisfaction with the handling of issues around the Petroleum Industry ACT, PIA, and ownership of Nigerian National Petroleum Corporation, NNPC, by the larger Nigerian Governors’ Forum.
lReiterated their earlier position that the next President of Nigeria must come from the Southern part of Nigeria in line with politics of equity, justice and fairness. The Forum thanked the host Governor, Ifeanyi Ugwuanyi, and chose Rivers State as the next host for the Southern Governors’ Forum meeting in November 2021.”
Nine governors attended the meeting, while seven others were represented by their deputies. Governor Willie Obiano of Anambra State neither attended the meeting nor sent his deputy.
Those in attendance included Babajide Sanwo-Olu of Lagos State; Rotimi Akeredolu of ,Ondo State, Nyesom Wike of Rivers State, Adegboyega Oyetola of Osun State; Ifeanyi Okowa of Delta State and Douye Diri of Bayelsa State.
Others include Dapo Abiodun of Ogun State; and Emmanuel Udom of Akwa Ibom State.
Similarly, the deputy governors of Oyo, Ekiti, Cross Rivers, Abia Ebonyi, Edo and Imo states represented their principals.
Lagos insists on right to collect VAT
As the Southern governors were attending the meeting, which is the third in the series in Enugu, Lagos State was in Abuja, maintaining its stance that it had the constitutional right to collect Value Added Tax, VAT, and not the Federal Inland Revenue Service, FIRS.
Consequently, the state, through its Attorney-General, Moyosore Onigbanjo, SAN, prayed the Court of Appeal sitting in Abuja to accede to its application to be joined as an interested party in the appeal the FIRS filed to set-aside the High Court judgement that gave Rivers State the right to collect VAT.
Moving the joinder application, Onigbanjo, SAN, argued that Lagos State is a necessary party whose interests would be affected by the outcome of the appeal by the FIRS.
“My Lord, it is not in dispute that Lagos, one of the federating states in Nigeria is entitled to collect VAT and that is our interest.
“Even the Appellant (FIRS) recognized our interest in their application for stay of execution and injunction pending appeal.
“The Appellant/Respondents have recognized that Lagos state has an interest in this matter.
“That being the case, it cannot now lie in the mouth of the Appellant to say that Lagos State has no interest in this matter,” Onigbanjo said.
He stressed that the fact that the appellate court had in a previous ruling, ordered both Rivers and Lagos states to maintain status quo on the issue of VAT collection, was enough proof that Lagos has sufficient interest in the matter.
He, therefore, pleaded the appellate court to, in the interest of fair hearing, admit Lagos State as a co-Respondent in the case, alongside Rivers State, saying it will help curb the multiplicity of suits on the same subject matter.
Rivers State, through its counsel, Ifedayo Adedipe, SAN, said it is not opposed to the joinder application by Lagos State.
Efforts by Mr. Tijani Gazali, SAN, who represented the Attorney-General of the Federation (2nd Respondent), to oppose the joinder application, was rejected by the appellate court for being incompetent.
Refuse application by Lagos State, FIRS pleads
On its part, the FIRS, through its lawyer, Mahmud Magaji, SAN, urged the appellate court to refuse the application by Lagos State.
FIRS maintained that Lagos State did not show that the matter could not be effectively decided by the court without its participation.
“My Lords, it is on record that despite the order of the Appeal Court, Lagos State still went ahead to pass the VAT Act,” counsel to FIRS added, as he urged the appellate court to dismiss the joinder request.
After it had listened to all the parties, the three-man panel of justices of the appellate court, led by Justice Haruna Tsanammi, reserved their ruling till a date they said will be communicated to the parties.
Court defers ruling, declines to appoint interim VAT collector
Earlier, the appellate court panel declined an oral application by both Rivers and Lagos states for a receiver or manager to be appointed, to in the interim, collect VAT from their territories, pending the conclusion of the case.
While rejecting the request, head of the Court of Appeal panel, Justice Tsanammi, ordered both states to file a formal application to that effect.
It will be recalled that the appellate court had in a ruling on September 10, ordered both Rivers and Lagos states to maintain status quo on the collection of VAT, pending determination of the appeal by the FIRS.
The appellate court said the order was to preserve the ‘Res’ (subject matter) of the appeal before it.
Specifically, it ordered all the parties that have subjected themselves before it to “refrain from taking any action to give effect to the judgement of the Federal High Court”, which gave Rivers State Government the right to collect VAT revenue, instead of the FIRS.
The order for maintenance of status quo followed an oral application made by counsel to the FIRS.
Rivers State had since gone to the Supreme Court to set-aside the order which it said was made in error.
It further urged the apex court to order that the appeal by FIRS be heard by a new panel.
FIRS is in its appeal, marked CA/PH/282/2021, praying the appellate court not only to set aside the High Court judgement, but also stay its execution.
It applied for an order of injunction to restrain Rivers State from interfering with its rights, duties and obligations, pending the conclusion of the appeal.
VAT law, our bid to ensure fiscal equity, says Ogun speaker
Meanwhile, Ogun State House of Assembly said yesterday that the proposed State Value Added Tax Law, 2021 remained one of its initiatives to achieve fiscal restructuring in the country to further ensure equity and fairness in revenue sharing among the federating units.
The speaker, Olakunle Oluomo, disclosed this while declaring open a stakeholders’ forum on “H.B. 073/OG/2021- A Bill For A Law To Impose And Charge Value Added Tax On Certain Goods And Services, Provide For The Administration of The Tax And For Related Purposes” held at the Assembly Complex, Oke-Mosan, Abeokuta.
Oluomo clarified that the proposed bill would ensure improved revenue to the state, arguing that the revenue item was not listed in the exclusive list of nation’s constitution.
Consequently, he said the state has the right to collect Value Added Tax,
The speaker noted that the South West Conference of Speakers is already putting in place more feasible modalities to enhance the collective development of the South-Western states, with a view to further promoting effective service delivery and charting the path towards true fiscal federalism.
Assuring stakeholders of speedy passage of the bill, the speaker noted that it had become imperative to improve the internally generated revenue of the state to aid the implementation of more socio- economic development in all parts of the state.
He noted that the state deserves far better than what it receives from VAT through the federation account, even as he canvassed higher percentage in the sharing formula of revenue accruable from VAT to local government councils to aid grassroot development.
On their part, stakeholders, including representatives of the state chapters of Association of Nigerian Authors, ANA, and the Guild of Public Affairs Analysts, Dr. Paul Oni, Committee for the Defence of Human Rights, CDHR, Yinka Folarin, Director of Industrial Promotion in the Ministry of Industry, Trade and Investments, Engr. Kehinde Akintomide and a former member of the Assembly, Hon. Habeeb Ajayi, among others, lauded the Assembly for the introduction of the bill.
They added that it was a clear indication that the institution remained sensitive, considerate and responsive to the yearnings of the people.
Calling for a review of the collectibles under VAT, the sharing percentage between state and local government councils, the stakeholders sought flexibility in VAT collection to encourage compliance and sustainability, especially as it affected small and medium scale businesses in the implementation of the law on its passage by the Assembly and assent by the governor.
Also, the Chairman, Board of Internal Revenue Service, Gbenga Olaleye, who called for amendment of the bill to include taxation of e-commerce and allied businesses, in view of the introduction of digital technology to commerce, proposed a sharing percentage of 70% to the state and remaining 30% to local government councils.