As the legal battle continues, the Rivers State government’s action has received support from some states, particularly Lagos, where the government is on the verge of making it a law to collect Value Added Tax (VAT) rather than the FIRS.
The bill authorizing Lagos to collect VAT was read for the third time and passed by lawmakers in the Lagos State House of Assembly on Thursday. As it awaits the governor’s signature, more states have indicated that they will participate.
Meanwhile, the Lagos State government has asked to be added as a co-respondent to the FIRS’s appeal court suit.
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Moyesore Onigbanjo, the state’s Attorney General and Commissioner of Justice, represented the state government at Friday’s hearing.
He informed the court that the state’s interest was at stake, emphasizing that if they were not joined, it would be a violation of a fair hearing.
Onigbanjo, a Senior Advocate of Nigeria (SAN), urged the court to hear the joinder application first, before the FIRS’s application for a stay of execution.
However, the federal agency’s counsel, Mahmud Magaji (SAN), urged the court to hear the main application first because it was of the utmost importance.
In its ruling, the appellate court ordered that the Lagos State government’s motion to join be heard and gave the applicants two days to file written addresses
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Similarly, respondents have been given two days to file their response, while applicants have been given one day to respond on the point of law.
Umahi Begs Governors to ‘Sheathe Their Swords’ in VAT Dispute
Ebonyi State Governor, David Umahi, has urged state governors to sheathe their swords as the dispute between state governments and the Federal Inland Revenue Service (FIRS) over who should collect Value Added Tax (VAT) continues.
He believes that if the FIRS is relieved of this responsibility, only a few states will benefit significantly, while others will suffer.
“Even if you had all the money in the world, you would be unable to use it. So it is very important, and it is coming at a very bad time,” the governor said on Channels Television’s Sunrise Daily on Friday.
“I beg my colleagues to sheathe their swords and let us get through this difficult period before we start arguing about who is right or wrong.
“We have to be our brother’s keeper; we have to figure out how to grow the economies of the weakest states, or we will breed a lot of insecurity in those superpowers; this is critical.”
Since the Rivers State government decided to test the legality of FIRS VAT collection in various states, a slew of lawsuits and rulings have emerged.
‘Ebonyi Must Be Pitied’
On August 9, a Federal High Court in Port Harcourt granted the state government the right to collect VAT – an order that affected other states.
Although the case is still before the Supreme Court, the most recent development is the reservation of the Court of Appeal in Abuja’s ruling on the Lagos State government’s application for adjoinder.
Governor Umahi, on the other hand, proposed that before states are allowed to collect VAT, the “weakest states” be given enough resources to give them a comparative advantage.
According to him, the federal government should contribute the majority of VAT, with state and local governments receiving 85% and the federal government receiving the remaining 15%.
“Now, the Federal Government and the superstates will benefit the most, and a number of states will collapse as a result of rampant law,” the governor lamented. “I am also urging the Federal Government to consider Ebonyi State, as we are severely disadvantaged.
“You say we should expand the economy, but how? We don’t have enough money to expand the economy. Agriculture exists, as do solid minerals, and our solid minerals are being stolen. Ebonyi State should be pitied; we are in a dire situation. We have a large number of unemployed youth.”