Meanwhile, the Court of Appeal, Abuja Division, had earlier ordered the Rivers Government, FIRS and the Attorney-General of the Federation to maintain status quo, pending the hearing and determination of applications before it in respect of VAT.
In Edo State, however, the speaker of the state House of Assembly, Marcus Onobun, said the House will consider enacting a law to enable the state to collect VAT. For Ondo State, the speaker of the House of Assembly, Mr Bamidele Oloyeloogun, said, the Assembly was studying the situation, adding that, the outcome of the ongoing legal tussle between the FIRS and the governments of Lagos and Rivers states on the matter would determine the step to be taken by the Assembly. He added that, “we don’t want to rush in and rush out on the matter, which is why we are biding our time. So, let us wait and see what the outcome of the legal tussle will be.
At the recent southern governors’ meeting, media reports stated that the southern states collectively backed VAT collection by states.Meanwhile, the Chartered Institute of Taxation of Nigeria , the body that regulates all tax professionals in the country, has directed its members to continue filing returns with the FIRS.
On the remote and immediate effect of the VAT war between the FG and the States, he said: “I hope we will not end up having the ‘cobra effect’, which technically means we may have intended and unintended consequences of our actions and we, therefore, need to manage this issue, in terms of the fallout. As an Institute, our position aligns with the provisions of our constitution. However, if we do not rein in our emotion, we may win the battle and lose the war.
As at last year, VAT collection was N2.2 trillion, out of that, about N550 billion was on import tax, which is already like 25 per cent. By the time you add VAT on federal government contracts, it can easily cross 30 per cent which means that the FG will now keep about 30 per cent instead of 15 per cent that they currently keep.”
He said this is surely not the best for investors confidence, stating that, the resolution of the VAT controversy should be both legal and political.He affirmed that it is important to have some engagements and discussions among the key players and participants.
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