Amid the dispute surrounding the collection of Value Added Tax in states, the Federal Inland Revenue Service has written a letter to the National Assembly, seeking the insertion of the item in the exclusive legislative list.
By being included in the executive legislative list, the Federal Government will continue to have powers to collect and administer VAT generated by states.
In August, the Federal High Court sitting in Port Harcourt, Rivers State, in a judgment with suit number FHC/PH/CS/149/2020, held that the Rivers State Government had the powers to collect VAT within its territory.
FIRS applied to the court for a stay of execution, but the agency’s application was rejected, with the court stating that granting it would negate the principle of equity.
Lagos State Government also wrote a letter written to the FIRS to henceforth stop the collection of VAT from businesses in the state. A VAT bill has also scaled the second reading at the state House of Assembly.
But the FIRS has demonstrated it is not willing to let the matter go as its Executive Chairman, Muhammad Nami, in a letter dated July 1, 2021, and addressed to the Chairman of the House Constitution Review Committee, who is also the Deputy Speaker of the House of Representatives, Idris Wase, sought that VAT be included in the exclusive legislative list.
The letter, which was obtained by AF24NEWS, had reference number FIRS/EC/CWREP/0416/21/037, and was received by Wase’s office on July 2.
It was titled, ‘Request for sponsorship of a bill for the establishment of the proposed Federal Revenue Court of Nigeria and the insertion of Value Added Tax under item 58 of the exclusive legislative list’.
The federal tax agency pleaded with the legislature to vest exclusively in it all adjudication of tax disputes, including federal tax laws, Companies Income Tax, Petroleum Tax, Income Tax, Capital Gain Tax, Stamp Duty, VAT, taxes, levies and other laws, regulations, proclamations, government notices and rules.
The letter read in part, “The Federal Inland Revenue Service further proposes the amendment of Section 251 (1) (b) of the Constitution of the FRN, 1999 (amended) by removing the exclusive jurisdiction of the Federal High Court only on anything connected or related to federal tax matters since same would be vested in the proposed federal revenue court.
“The Federal Inland Revenue Service also proposes the insertion of Value Added Tax immediately after Stamp Duties under item 58, part II of the 2nd schedule of the 1999 Constitution of the FRN.
“The Federal Inland Revenue Service appreciates the maximum cooperation and support we are receiving from your good office on tax matters generally.
“This has boosted our morale and determination to do more for the government in tax revenue generation.
“The FIRS therefore wishes to further request that the House of Representatives consider the request for the establishment of the Federal Revenue Court.”