The Lagos State government has insisted that it has the right to collect Value Added Tax (VAT), and not the Federal Inland Revenue Service (FIRS).
Moyosore Onigbanjo, the Attorney-General of Lagos State, stated the state’s position during a case at the Court of Appeal on Thursday.
A Federal High Court sitting in Port Harcourt, Rivers State, had last month restrained the FIRS from collecting VAT and Personal Income Tax (PIT) following litigation instituted by the Rivers State government, ruling that the state should take charge of the collection.
Subsequently, the Rivers and Lagos houses of assembly passed domesticated VAT bills, which have been signed into law by governors Nyesom Wike and Babajide Sanwo-Olu respectively.
However, the Court of Appeal sitting in Abuja on 10 September ordered Rivers State to maintain status quo on the collection of VAT pending the determination of an appeal that was lodged before it by the FIRS.
The court also decided not to join Lagos State as a party to the suit instituted by the Rivers State government.
At the resumption of the case on Thursday, Onigbanjo said Lagos State is constitutionally empowered to collect VAT.
He said: “My lord, it is not in dispute that Lagos, one of the federating states in Nigeria is entitled to collect VAT and that’s our interest.
“Even the appellant recognised that the Lagos state government has an interest in the matter in their affidavits in support of stay of execution where copious reference was made to the Lagos state government.
“That been the case, it cannot now lie in the mouth of the appellant to say that Lagos state has no interest in this matter.
“It was in recognition of the interest of Lagos state that this court made an order for status quo to be maintained by all parties before it.”
According to the Lagos AG, if the state is not joined, there is bound to be another cause of action since the state would enforce the VAT act which has been enacted.
“In view of the inconsistencies contained in the counter affidavit of the appellant, I pray the court to grant our application in favour of Lagos state,” the attorney-general said.
Ifedayo Adedipe, counsel for Rivers State, also prayed the court to grant the application of Lagos State.
But Tijani Gazali, who appeared for the Attorney-General of the federation (2nd respondent), said they have served their written address on Lagos.
However, it was filed out of time and consequently withdrawn, hence struck out.
The court subsequently reserved ruling in the application filed by the Lagos State government