Barely 24 hours after the President of the Senate, Senator Ahmad Lawan, expressed support for continued collection of the Value Added Tax (VAT) nationwide by the Federal Inland Revenue Service’s (FIRS’) in spite of the legal tussles between the agency and state governments over collection of the consumption tax, the Federal Government on Thursday also maintained that FIRS had the legal rights to collect the tax,
Expressing the government’s position on the vexed matter during a chat with the News Agency of Nigeria (NAN) in New York, the Attorney-General of the Federation and Minister of Justice, Abubakar Malami, insisted that the federal revenue agency had the constitutional backing to continue the collection of VAT in the country.
Malami, who spoke against the backdrop of the legal tussle between the FIRS and Rivers and Lagos State Governments over the collection of VAT, clarified that the ruling of the Court of Appeal that FIRS and the Rivers Government maintain status quo, favoured FIRS.
According to him, it was the FIRS that had been collecting the VAT before the dispute arose, over which the Rivers State Government filed its suit at the High Court, pointing out that the Court of Appeal order is in favour of the federal revenue agency
He clarified: “The position of not only the Federal Government but indeed the judiciary is the fact that status quo associated with the collecting of VAT should be maintained.
“And as far as the judicial system is concerned, the status quo as at the time the parties approached the court, it was the Federal Inland Revenue Service that was indeed collecting the value added tax.
“So with that in mind, the Federal Government has succeeded in obtaining an order that establishes the sustenance of the status quo, which status quo is that the Federal Inland Revenue Service should continue collection.
“This is pending the determination of the cases that were instituted by states, particularly the Rivers State Government and the Lagos State Government. The cases are being determined by the court”, the nation’s chief law officer added.
It would be recalled that following the Court of Appeal order that all parties to the VAT dispute should maintain status quo ante pending the determination of the suit before it, the Rivers State Government had approached the Supreme Court to set aside the Court of Appeal’s September 10 ruling ordering it and FIRS to maintain status quo on the issue of VAT collection.
The three-member panel of the Court of Appeal headed by Haruna Tsammani, issued the order being challenged at the Supreme Court by the Rivers State Government.
Amongst other reliefs, the state government also wanted the Supreme Court to disband the panel of the appelate court, which gave the interim order and ordered another one to be constituted to hear the case.
Commenting further on the legal implications of the Court of Appeal order, Malami said: “But one thing of interest is the fact that the Federal Government had indeed taken cognisance of the fact that where there exists a dispute between a State and Federal Government, it is the Supreme Court that should naturally have the jurisdiction to determine the dispute between the state and the federation.
“And we are taking steps to consider the possibility of instituting an action before the Supreme Court for the purpose of having this matter determined once and for all”, the minister added.