VAT: Makinde, Wike, others ‘in Soup’ as FG Heads to Court Over tax Legislation

Oyo state governor; Engr Seyi Makinde and his counterparts from Southern region of the country will be facing a series of suits from the Federal Government of Nigeria over their recent legislations on collection of Value Added Tax (VAT) in their respective states.

Revealing this to newsmen on Wednesday 6th October 2021 after the meeting of the Federal Executive Council at the Presidential Villa, Abuja, Attorney-General of the Federation and Minister of Justice, Abubakar Malami, SAN disclosed that the Federal Government, may at the Supreme Court challenge the southern governors’ resolution.

According to Malami, the Supreme Court has authority over things such as VAT legislation, and the Federal Government is considering taking the case to the Court.

In his words:

“The issue of VAT, well, 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 that judgment and the laws that were passed by those state governments, the Federal Government filed an appeal against the judgment challenging the laws that were put in place, which I feel has been determined by the Court of Appeal.

“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 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 judgment 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 government.

“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 been canvassed, presented for the determination of the court.

“And we are indeed litigating contending this 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 government 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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