By Prisca Sam-Duru
The face-off between the Rivers State Government and the Federal Inland Revenue Service, FIRS, over the administration of Value Added Tax, VAT, has been generating a lot of commentaries from the general public.
Many Nigerians seem to be in support of Governor Nyesom Wike of Rivers State for his stance on the issue especially after learning about the dismissal of an application of the FIRS seeking a stay of execution of an earlier judgement of the Federal High Court sitting in Port Harcourt, which was eventually granted yesterday by the Appeal Court in Abuja.
The Federal High Court had ruled that constitutionally, it was the role of the state government to collect VAT and, not FIRS. The FIRS had refused to obey the ruling including another by Justice Stephen Pam dismissing their appeal for stay of execution. Instead, it directed tax payers in Rivers State to continue to comply with the VAT Act, until its appeal by a superior court is determined. The Appeal court granted their prayers yesterday in Abuja. FIRS had also taken a step further by appealing to the National Assembly to come up with a bill to include VAT as an exclusive matter under item 158 and to also amend section 251 with the 1999 constitution.
Describing this move as “a hangover of the monarchical system that we find ourselves where the king can do no wrong”, lawyer and Public Affairs Analyst, Liborous Oshoma said that “By the implication of the FIRS letter, if you look at paragraph 58 and 59, the taxes to be collected by the federal government, admitted by the FIRS, are stamp duties, taxation of income, profit and capital gain, except as otherwise prescribed by this constitution, not prescribed by the National Assembly but, by this constitution”. Oshoma, who was a guest on Arise TV where he discussed issues regarding VAT administration in the country, explained that “It is not stated anywhere that the federal government should exclusively collect consumption tax and so the FIRS also knows this position”. He explained further that “What you have is the king can do no wrong mentality of ok yes, since the federal government is the behemoth, it can do anything so, let’s have a situation where we begin to legislate on even in areas we do not have powers to legislate on.
“So the moment that judgement in 2019 came up, FIRS secretly wrote a letter to the National Assembly requesting them to amend the constitution to include the VAT but unfortunately that issue had not been dealt with by the National Assembly before this issue between the Attorney General of Rivers State and the FIRS”. Rather than wait for matters to degenerate into the public spat being witnessed today, Oshoma insisted that all the attorney generals of the states should have joined in the suit and then challenged that act vis a vis the provisions of section 4 of the constitution.
“What I think the states should do is to let all the Attorneys General join in that suit. It ordinarily should have started from the Supreme Court being a constitutional matter in interpretation”.
Being someone who had always been an advocate of restructuring, Oshoma said that “The restructuring that we clamour for might not necessarily come from amending the constitution but through interpretations of our laws.
“I think it is high time that our courts stopped this attitude of conflicting judgements, let them be unanimous on issues such as this and expand the frontiers of our legal jurisprudence”.
On the alarm raised by Governor Wike on the ploy by government to move the case to Abuja, Oshoma said it was high time the judiciary refused to be used by the federal government to do dirty jobs.
“Any attempt to move that matter from where it is to a court that will be favourably disposed to granting judgement to one party, will automatically, take away the already whittled down influence of the judiciary as far as democracy practiced today in Nigeria is concerned.
“The court or CJN should resist… I trust the president court of appeal, that she would resist any attempt to be brow bitten into doing that”. Yesterday’s Appeal Court decision has overtaken his position although the substantive matter had not been decided.
Throwing his weight behind the states to resist the move by FIRS, he quickly added that the implication for “Nigerians is that for you to become a governor, you must be ready to work. We agreed like in other countries, richer states would contribute at least a percentage to the federal to support the weaker ones; that is when the states are vulnerable not in this case, what we have are lazy states and that is why we all are agitating for states creation. Some governors live in America, some are in Abuja persistently and at the end of the month, they collect allocation, go back and share and then go back to Abuja. We can’t build Nigeria like that”.
Asked whether he believes that the FIRS knew all the while that they were in the wrong which informed the secret letter, he said that the matter was not novel since there were two other judgements; court judgement in Ukeje and the FIRS where the federal high court held that the VAT Act was contrary to the provisions of the constitution, having not derived its origin, its source from any provisions of the constitution and also on the ground that the National Assembly by virtue of section 4 does not have powers to legislate on consumption taxes and; the registered trustee of hotel owners and managers judgement to that effect. The Attorney General of Rivers State and FIRS came later”.He opined that the best way forward is for the parties involved to come to a round table to discuss because those that would bear the brunt are the consumers and, business owners who will unnecessarily have to pay double taxation where it should be one. “So I think the FIRS should come down from their high horse and sit at a round table with the governor”, he added. Concerning the news about some states possibly going into bankruptcy which may also necessitate their enacting laws regarding VAT administration, Oshoma said that even with VAT, a lot of states are not able to pay salaries regularly meaning that things will become pretty bad when it’s removed. As a way forward he said, “We need to have governors that will think outside the box, even if it means collaboration between the states”, adding that they should be encouraged just like Lagos and Kebbi states collaborated to produce rice. “So why would other states sit down and allow terrorists to run riot and you are looking for amnesty for terrorists because you know money will always come from the centre? “Let’s move away from this idea of feeding bottle federal government, feeding bottle system of government and have fiscal federalism that this same party had been agitating for while they were in opposition”.