FG mulls taking Rivers, Lagos to supreme court over VAT collection

The federal government says it is considering filing a suit at the supreme court to resolve the ongoing dispute about value-added tax (VAT) collection.

The Federal Inland Revenue Service (FIRS) and some state governments are in a legal tussle over VAT collection. Rivers and Lagos state governments had enacted laws and called for decentralisation of collection, while some states want a centralised collection.

While the Lagos state government is seeking to join Rivers in the suit, the matter is currently pending at the supreme court. 

Last week, the court of appeal directed states to maintain status quo on VAT collection pending the determination of an appeal filed by the FIRS.

Abubakar Malami, attorney-general of the federation (AGF), told NAN on Wednesday in New York that the federal government would like the matter to be determined “once and for all”.

“But one thing of interest is the fact that the federal government had indeed taken cognisance of the fact that where there exists a dispute between a state and federal government, it is the supreme court that should naturally have the jurisdiction to determine the dispute between the state and the federation,” Malami said.

“And we are taking steps to consider the possibility of instituting an action before the supreme court for the purpose of having this matter determined once and for all.”

The AGF maintained that the FIRS would continue to collect VAT following the directive of the court of appeal. 

He said that it was the FIRS that had been collecting the VAT before the dispute arose, over which the Rivers government approached the high court.

“The position of not only the federal government but indeed the judiciary is the fact that status quo associated with the collecting of VAT should be maintained,” Malami said.

“And as far as the judicial system is concerned, the status quo as at the time the parties approached the court, it was the Federal Inland Revenue Service that was indeed collecting the value-added tax.

“So with that in mind, the federal government has succeeded in obtaining an order that establishes the sustenance of the status quo, which status quo is that the Federal Inland Revenue Service should continue collection.

“This is pending the determination of the cases that were instituted by states, particularly the Rivers state government and the Lagos state government. The cases are being determined by the court.”