A former Vice-President of the Nigerian Bar Association, Mr. Monday Ubani, says the Federal Government should stop insisting on collection of Value Added Tax as doing so will amount to a contravention of the Federal High Court judgment.
Ubani, who was a guest on PUNCH Live on Wednesday, added that the Federal Inland Revenue Service cannot ask Nigerians to continue paying VAT to the Federal Government when the judgment giving states the power to do so had not been upturned.
A Federal High Court in Rivers State had stated that VAT should be collected by the states. An attempt by the FIRS to maintain the status quo was thrown out by the court.
Governor Nyesom Wike has since signed a law mandating all firms and individuals in Rivers State to pay VAT to the state. Similarly, the Lagos State Government has drafted a bill that will empower the state to collect VAT.
Rivers and Lagos State are the wealthiest states in Nigeria in terms of Internally Generated Revenue and account for over 65 per cent of total VAT in the country.
The FIRS has, however, insisted that no one should pay VAT to the states until the matter had been decided by the Supreme Court.
Reacting to the controversy, Ubani said the Federal Government needed to lead by example by obeying court orders.
He added, “The law is that states should collect VAT. That is the import of the court judgment. The attempt (of the Federal Government) to stay execution was defeated. It failed woefully. So, the position of the law today is that the states have the right and authority to collect VAT. Until that decision is reversed, the law stands.
“The Federal Government knows this and the constitution states that every authority and power must respect court judgments. And if our leaders swore to uphold the provisions of the constitution, there is no way they can advise people to disobey a competent court order.”
Ubani said the court order was a positive development especially with regards to fiscal federalism and restructuring which many states have been clamouring for.
The former NBA Vice-President added that since the Federal Government had failed to promote fiscal federalism, states had begun attaining it through legal means which is commendable.
He recalled that during the tenure of Bola Tinubu of Lagos State in the early 2000s, the state Attorney-General, Prof. Yemi Osinbajo (now Vice-President), sued the Olusegun Obasanjo-led Federal Government on issues relating to local government creation and others and won.
Ubani therefore stated that Wike’s approach was not new.
“I am sure this matter will end up in the Supreme Court. We are all waiting to see the legal jurisprudence that will emanate from this very innovative case. It is something that all of us are looking forward to. But for now, the Federal Government is advised to respect that decision.
“They shouldn’t give an impression that they are lawless; they don’t listen, they don’t obey court orders. That shouldn’t be the perception that the Federal Government should give. It gives a wrong impression. The world has become a global village, the world is watching. And if the government does not respect courts, then there is a problem. So, I will advise the FIRS to obey court orders,” Ubani added.
Author:Eniola Akinkuotu
