That Federal Tax Office (FIRS) has asked the National Assembly to add VAT (TAX) to the exclusive legislative list.
TheCable understands that the move gives the agency exclusive power to collect VAT.
Recently a federal court in Port Harcourt did issue an injunction the FIRS from collecting VAT (VAT) and income tax (PIT) in the state of Rivers.
The federal tax authority has has appealed against the judgment.
In a letter to the National Assembly, FIRS informed the House of Representatives that the proposals would increase government revenues.
She also called for the need to exclusively include all decisions in tax disputes, including federal tax laws, corporate income tax, petroleum tax, income tax, capital gains tax, stamp duty, sales tax and taxes and duties, as well as other laws, regulations, proclamations, government notices and rules to the federal collector.
“The Federal Tax Office (FIRS) proposes the introduction of the value added tax immediately after the stamp duty according to Article 58 Part II of the 2nd Annex of the Constitution of the FRN of 1999”, it says in the letter.
JURISDICTION OF VAT COLLECTION
Although the legal position is clear, the case is a delicate one, according to the Chartered Institute of Taxation of Nigeria (CITN). The professional group cited two cases in which courts had declared some provisions of the Value Added Tax Act are unconstitutional.
Despite several cases decided by the highest court, the Supreme Court has never ruled on the fundamental question of VAT collection or the VAT Act.
In Emmanuel Chukwuka Ukala v. FIRS & AG FEDERATION in lawsuit no.FHC / PH / CS / 30/2020, Judge IO Oshomah in the Portharcourt department of the Federal Supreme Court on December 11, 2020 expressly stated that the National Assembly had no power to enact the VAT Act.
The court had too the sales tax law repealed.
Reviews by TheCable also showed that Part II of the simultaneous list of laws of the second appendix to the 1999 Constitution, as amended, delegated the collection of taxes to the state government or some other state agency.
According to the Value Added Tax Act, the revenue from value added tax is divided between the federal government (15 percent), the state (50 percent) and local government (35 percent), with the FIRS board taking responsibility for the collection.
Regardless, Rivers State Governor Nyesom Wike said Thursday, Law on the collection of value added tax (VAT) signed.
Explaining the state’s position, Wike asked why the “state government is placing a N30 billion contract and 7.5 percent sales tax (nearly N3 billion) is now deducted and paid to the federal government”.
“Now look at 7.5% of the 30 billion N contracts that we have given to companies in the state of Rivers, you are going to speak of almost 3 billion N just from that source. Now, at the end of the month, the Rivers state government has never received more than N2 billion from sales tax. So I’ve added more to it by getting the contract and you’re giving me less. What is the reason for it. “
He complained about plans by the FIRS to introduce a vehicle tax that would remove more tariffs from the states and further emasculate them financially.