As the National Assembly resumes from its annual recess on Tuesday, the back and forth over the collection of Value Added Tax (VAT) may be brought before the House soon. The development has, again put to test the nation’s fidelity to the principle of federal system of government
Although there is no singular model of federal system and every democracy is free to adopt a style of federalism that works, such a system must comply with the spirit and letter of the constitution.
It is good enough that some states of the federation units are testing the provisions of the Constitution of the Federal Republic of Nigeria 1999 (as amended) and the courts are already making informed pronouncements as to the interpretation of the Constitution. What I find disturbing is the ambush about to be laid in the way of the interpretation through an amendment to the Constitution.
However, it is important to emphasise that the 1999 Constitution has no residual list, and all matters not identified in the exclusive concurrent, and the local government lists come under the jurisdiction of the states.
This silent rule has been tested at the Supreme Court in the case between the Attorney General of the Federation and Minister of Justice and Attorney General of Lagos and Commissioner for Justice and it was decided in favour of the states.
The Supreme Court in suit number SC. 340/2010 declared that the federal government lacked the constitutional powers to make laws outside its legislative competence, which are by implication residual matters meant for the State Assembly.
The apex court also held the National Assembly cannot, in the exercise of its powers to enact laws, take the liberty to confer power or authority on the federal government or any of its agencies to engage in matters, which ordinarily ought to be the responsibility of state government or its agencies.
Just like the ongoing debate on the collection of VAT, the Lagos State government in 2003 passed into law the Hotel Licencing Law Cap H6 Laws of Lagos State of Nigeria 2003, which conflicted with the mandate of the Nigerian Tourism Development Corporation Act.
Lagos government in 2009 published a public notice that registration of hotels and tourism-related establishments in Lagos State was the exclusive responsibility of the state.
In a similar reaction to the position of FIRS on the VAT debacle, NTDC issued a public notice advising all operators of hotels, and companies alike to disregard the earlier notice issued by the Lagos State government.
In the end, the Supreme Court ruled in favour of Lagos and held that the Law promulgated by Lagos State was not among items in the Exclusive and Concurrent lists but was rather among residual matters for the State.
Interestingly, to make nonsense of the position of the court, the Nigeria Tourism Development Authority (NTDA) ACT CAP N137LFN, 2004 9 (Repeal and Enactment) Bill, 2017 (SB.429) was sponsored at the National Assembly. After going the whole 360 degrees at the parliament, President Muhammdu Buhari in 2019 withheld ascent as he said the bill contradicts the 1999 constitution, and that ended the story.
The raging debate over VAT is another test in Nigeria’s democratic development. FIRS reportedly wrote to the special committee on the review of the 1999 Constitution to particularly include VAT in item 58 on the exclusive legislative list. This already suggested that the federal government may be fighting a lost battle in the court and has to turn to the National Assembly for a political soft landing. Should the federal government succeed with the amendment, whatever decision arrived at in the courts will remain an academic exercise.
This is the beauty of democracy, the law as it is today may favour the state government, but if the laws are amended the music will change and those involved would have to dance to the new beat.
The big question, however, is whether or not the amendment will be ‘smuggled into the ongoing constitution amendment process as public hearing has commenced on the bills slated for amendment. Also, giving the position of Lagos State on the matter, will Speaker Gbajabimila who is from Lagos State allow the amendment in the House remotely controlled by northern lawmakers who may favour the change?
If the bill survives at the National Assembly, how many state governors will arm-twist their state houses of assembly to support or oppose the amendment? Let the politics begin!