Zainab Ahmed: FG considering out-of-court settlement on VAT tussle

Zainab Ahmed, minister of finance, budget and national planning, says the federal government is considering political paths to resolve the ongoing value-added tax (VAT) tussle.

Ahmed said this during an interview on Channels Television on Friday.

In the last few months, the FIRS and some state governments engaged in a legal tussle over the jurisdiction of VAT collection.

Rivers and Lagos state governments enacted laws and called for decentralisation of VAT collection, while some states want centralised collection.

The legal tussle followed the judgment of the federal high court in Port Harcourt, which restrained the FIRS from collecting VAT and personal income tax (PIT) in Rivers state.

At the lower court, the FIRS had appealed for a stay of execution, but the court dismissed it on the basis that it would “negate the principle of equity”.

Consequently, FIRS went to the court of appeal — the court ordered both Rivers and Lagos states to maintain status quo over the collection of VAT until the determination of the suit.

Not satisfied with the injunction, the Rivers state government filed the matter before the supreme court. No date has been fixed for the hearing of the case at the apex court. 

Speaking during the interview, the finance minister said the federal government was seeking a positive political solution to the issue.

“I have to do this carefully because they are issues in court, and I am not supposed to be talking about issues in court,” she said.

“But, I do hope that this problem can be solved by sitting on the table, not on the pages of newspapers, not disagreements in court because it is possible to solve it on the table.”

“There’s a lot of effort going on right now. I said I didn’t want to discuss it because it is in court so I have to be careful.

“Yes, there will be a positive political solution. We are working towards an out-of-court solution.”