As National Assembly lawmakers return to work today from their two-month recess, the contentious issue of Value Added Tax (VAT) collection by the Federal Inland Revenue Service (FIRS) is one of the national issues that will dominate debates at the sessions, LEADERSHIP can report.
Already, the FIRS has taken the battle for VAT collection in the states to the red chamber.
Specifically, the FIRS has approached the Constitution Amendment Committee headed by Deputy Senate President Ovie Omo-Agege, seeking the alteration of some sections of the constitution to enable it to collect VAT in the states.
On September 6, 2021, a federal high court sitting in Port Harcourt had dismissed an application by the FIRS seeking to stop the Rivers State government from collecting VAT.
But last Friday, the Court of Appeal sitting in Abuja ordered both Rivers and Lagos States to maintain status quo on the collection of VAT pending the determination of an appeal that was lodged before it by the FIRS. The Appeal court said the order was to preserve the ‘Res’ (subject matter) of the appeal before it.
However, Lagos State had through its attorney-general, Moyosore Onigbanjo, SAN, protested against the issuance of an order for the maintenance of status quo, insisting that such an order could not be binding on it since it was yet to be joined as a party in the appeal by FIRS.
But in an effort to take full control of VAT collection in the states, FIRS, in a letter to the Constitution Amendment committee, with references number FIRS/EC/CWREP/0416/21/037, is requesting 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.
FIRS wants the lawmakers to exclusively vest 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 on it.
VAT: Will Constitution Amendment Survive In The 9th Assembly?
Speaking on the VAT debacle, elder statesman and the immediate past secretary general of the Arewa Consultative Forum (ACF), Anthony Sani, said some governors were behaving as if they were foreigners.
Sani, who called for caution on the contentious VAT issue, added that those hankering for VAT to be collected and retained by states are proponents of a form of restructuring of Nigeria where Nigerians would live as if they are in different continents.
“They do not know that narrowing inequality in a nation is an attribute of good leadership and good for not only politics but also good for economics. Such people should be reminded that over the long history of the nations and long lives of individuals, the powerful and the weak, the rich and the poor often change places,” Sani said.
Also before the federal lawmakers is the harmonisation of the Electoral Act Amendment Bill.
LEADERSHIP reports that the lawmakers are set to announce a harmonisation committee for the final passage of the bill.
Both the Senate and the House of Representatives passed different versions of the Electoral Act Amendment Bill with section 52 (3) being the most contentious.
While the Senate provides in the Section 52 (3) for the Independent National Electoral Commission (INEC) to seek clearance from the National Assembly and the Nigeria Communications Commission (NCC) before taking a decision on the electronic voting and electronic transmission of election results as being yearned for by Nigerians, the House gave the electoral umpire the discretion of deciding when and where electronic voting and electronic transmission of election results should be done. The harmonisation committee will unify their positions before sending the bill for presidential assent.
Another issue before the Senate is the passage of the gender equality bill.
Civil Society Organisations (CSOs) had taken on the National Assembly, asking it to take necessary action towards the passage of the Gender Equality Bill when they resume today.
According to the CSOs, passage of the bill will strengthen the fight against violence on women and children.
Speaking, the director of programmes, Yiaga Africa, Cynthia Mbamalu said the pandemic exposed women and children to violence, adding that young girls, women, babies and even young boys were abused because the laws do not provide a strong mechanism for people to pursue justice for survivors.
They called on the National Assembly members to ensure they pass the equal opportunity bill.
“We are looking at the laws we have, the loopholes, and we will propose amendments. We want the Gender and Equal Opportunity Bill to be passed into law. In the 8th assembly, the bill was not passed. The Senate president has promised to engage other members for the passage of the bill. As they resume, we want the consideration of gender and equal opportunity rights to be taken seriously. We want the president to assent to the bill when passed,” Cynthia said, adding that the passage of the gender opportunity bill and the review of the VAB Act will enable women to participate fully in the 2023 general elections.
Also, the VAB coordinator in the FCT, Dr Ene Ede, said activists will engage in high level advocacy to achieve the passage of the Gender Equality Bill.
On her part, the representative of the National Human Rights Commission (NHRC), Mariam Kadiri, said the agency will work with all stakeholders in addressing human rights abuses, and added that good laws will help victims to get justice.
United Nations (UN) Women representative, Kenechukwu Nbajuogu, said elimination of violence against women and children is key adding that they have been working with the National Assembly to ensure adequate review of the gender-based laws.
Meanwhile, a member of the House of Representatives, Hon. Farah Dagogo, has said the controversy concerning the collection of Value Added Tax (VAT) cannot be discussed at the National Assembly as the issue was still before the courts.
Dagogo, who represents Bonny/Degema Federal Constituency, disclosed this yesterday while speaking with LEADERSHIP in a telephone chat in Port Harcourt.
He said, “The matter is still before the court and there is no way the National Assembly can discuss a matter that is already before the courts.”
Governor Umahi Opposes States’ Collection Of VAT
Ebonyi State Governor David Umahi has joined his counterparts in opposing the quest of state governments to collect Value Added Tax (VAT) instead of the Federal Internal Revenue Service (FIRS).
Umahi stated his position yesterday at a dinner in honor of Nigerian Ambassador to Benin Republic and the former Chief of Army Staff, Lt-Gen Tukur Buratai at the New Governor’s Lodge, Abakaliki.
He said, “Ebonyi, as a state, is not in support of any state collecting VAT; we are in support that FIRS should continue to collect tax and share.”
On the incessant calls for sit-at-home order, Governor Umahi stated that the state, as usual, would not subscribe to incessant calls for sit-at-home protest, insisting that any civil servant who absents him/herself from work on Monday and Tuesday would be sanctioned.
According to him, “Evil will continue to thrive if good people keep quiet; we must make Ebonyi State very exceptional by rising to the challenges. When we shout ‘true federalism’, I say I agree but it should be administrative and restructuring.
“We are destroying our economy; the sit-at-home is not happening in the South West; the North is not sitting at home. Each time we sit at home, we lose over N10 billion in our economy, so Ebonyi State will not sit at home any day.”
Governor Umahi directed commissioners and other relevant authorities to go all out and ensure that civil servants come to work.
“For the markets, I will personally be in the markets; anyone who is no longer interested in owning shops can go home.”
Governor Umahi thanked the former army chief for his contribution in reducing the incidences of insecurity during his time.
“One of the things the former army chief did for Ebonyi State is manpower development, and that is by bringing the Tukur Buratai Institute for Peace and Conflict Resolution as well as the Army Referral Hospital to Ebonyi State.
“Today, we want to thank you very highly for this honour and commitment to the welfare of our people.”
Ambassador Buratai commended the governor on his infrastructural transformation of the state.
While describing the governor as a general in strategy and tactics, Ambassador Buratai said Governor Umahi had become a household name in Nigeria because of his ardent support to the welfare of the Army Officers.
Fear Grip FIRS Tax Consultants
As the row over VAT collection deepens across the country, a tax expert said some consultants collecting VAT for the Federal Inland Revenue Service (FIRS) could lose their jobs if the state governments agitating for VAT collection have their way.
According to the tax expert, Lawrence Emeka Ihebie, the possibility of the courts deciding the matter in favour of the states is bad news to the consultants.
He maintained that the implication is that many of them would lose their briefs and, by extension, cut their operational cost, including wage bills.
“If the states have their way”, Ihebie said, “the number of taxpayers with FIRS will drastically reduce, but that doesn’t mean that it will shrink to the extent that they will no longer need the consultants. They may not have more work to do again. It will surely affect them. They may have to lose their briefs.”
LEADERSHIP gathered that the consultants are usually contracted to collect a particular tax. Most of the consultants are basically engaged to audit financial records of companies that are suspected not to faithfully remit their taxes.
They advise the FIRS on their assessment which then issues assessment based on their advice. They are paid a percentage of what is collected from tax defaulters, but that is after all the taxes are collected, and probably after litigations and agreements.
However, Ihebie said the smart ones among them should be able to adapt and work with the respective states.
“The view is that there will be more tax-related disputes between and among states, and taxpayers will find it difficult to navigate between input and output VAT.
“It might be that the states will need some of the tax consultants,” he said in an interview with our correspondent.
“The states will need the skills of the consultants; if not for anything, to train their tax officers in effective revenue collection.”
The FIRS also engages lawyers to represent it in court on tax disputes.