VAT War: FIRS’ Exclusive List Push Suffers Setback At NASS

Strong Indications have emerged that the attempt by the Federal Inland Revenue Service to have the exclusive powers to collect Value Added Tax has stalled at the National Assembly.

Investigations by our correspondent revealed that the two chambers of the federal parliament would not debate the controversial issues of the Value Added Tax and Stamp Duty due to litigation.

The Executive Chairman of the Federal Inland Revenue Service, Muhammad Nami, had penultimate week, told the Senate Joint Committee working on the Medium-Term Expenditure Framework and Fiscal Strategy Paper, that the agency would soon approach the nation’s legislature with a bill to amend the Finance Act 2021.

The amendment, according to Nami, will centre basically on the issue of Stamp Duty and how to drag those transacting businesses on the social media to the tax net.

Shortly after the federal lawmakers adjourned for the annual long recess, the FIRS sent a letter to the committees working on the constitution review at both chambers, seeking amendments to the constitution, to give it the sole power to collect VAT in Nigeria.

Recently, the Nigeria’s Governors Forum dragged the FIRS to court on the issue of Stamp Duty.

Similarly, the governments of Rivers and Lagos states are in court with the federal tax agency, seeking to take over the collection of VAT in their respective states.

The spokesperson for the Senate, Senator Ajibola Basiru, declined comments on the controversial issues when contacted to know if the chamber would debate the VAT issue now that the federal lawmakers had resumed.

He said, “I don’t want to talk about anything that has to do with the issue of VAT and Stamp Duty. They are subjudice.”

Similarly, the Chairman, Senate Committee on Agriculture, Senator Abdullahi Adamu, declined comments when contacted on the issue.

He said, “As a lawyer, when a matter is before a court of competent jurisdiction, making comments on it will be subjudice.”

The Chairman, Senate Public Accounts Committee, Senator Mathew Urhoghide, and Senator Abba Moro, agreed with the submissions of the Senate spokesperson when contacted on the issue.

A ranking senator, who spoke to our correspondent on condition of anonymity said the VAT and Stamp Duty issue would not be brought forward for debate.

He said, “We have it in our legislative rule in the National Assembly that we should not debate any issue that is pending before the court.

‘The implication of this is that we will not hold any debate on VAT and Stamp Duty if the cases had not been decided at the court.

“Even if the executive arm of government brings the Finance Act Amendment Bill 2022 and it contains the issue of Stamp Duty while the matter is still in court, we will not debate the Stamp Duty aspect.”

The Senate spokesperson, however, said the Senate would continue work on the issue of Constitution review.

Basiru said, “The issue of constitution review is still on course and the two chambers are expected to organise a retreat to finalise the work in September.

A member of the Constitution Review Committee told our correspondent on condition of anonymity on Friday that the memo by the FIRS chairman to push VAT into the exclusive legislative list had died a natural death.

He said, “ Both chambers would in a matter of weeks round off work on constitution review and submit our report to the whole house for consideration.

“What the FIRS is requesting is belated. They want to drag us back and it cannot work. If we want to work on the FIRS proposal, we would organise another public hearing and send the document to all the state houses of Assembly for their input.

“The time is against us. We definitely cannot consider the FIRS proposal.”

A former Deputy President of the Senate, Ike Ekweremadu, has also during the week, advised his colleagues, not to embark on any legislation over the collection of VAT and Stamp Duties.

He said allowing the litigation to run the full course could be a major step towards strengthening the nation’s federalism.

Ekweremadu gave the advice in a statement by his media adviser, Uche Anichukwu, titled, “Feeding bottle federalism: Allow VAT legal battle run full course – Ekweremadu”

The ranking Senator also demanded an expeditious hearing of the VAT, stamp duty suits pending in the courts.

He argued that any constitution amendment to transfer VAT collection to the Exclusive Legislative List, as reportedly requested by the FIRS, “would amount to changing the goal post in the middle of a game.”

The Senator was the chairman of the constitution amendment process in the Sixth, Seventh, and Eighth Senate.

He said, “It is untidy for the Presidency or its agency to come through the backdoor to seek legislative intervention in its favour on the same matter that is prejudice.

“The ball is now in the court of the judiciary and all we should seek at this juncture is an expedited and courageous adjudication of the lawsuits.”