Rotimi Akeredolu, Governor of Ondo State, has said plans by the Federal Inland Revenue Service (FIRS) to seek an amendment to the Value Added Tax (VAT) law is “dead on arrival”.
Governor Akeredolu, who is also the Chairman of the Southern Governors Forum, said this in an interview on Sunday.
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.
Separately, the FIRS had in memos leaked online wrote to both chambers of the National Assembly seeking an amendment to move VAT to the exclusive list, thereby advocating for the tax to be solely collected and controlled by the Federal Government.
Reacting to the move by the FIRS, Governor Akeredolu said it is unconstitutional for the Federal Government to be sharing VAT.
The governor, who is a Senior Advocate of Nigeria (SAN) and former national chairman of the Nigerian Bar Association (NBA), insisted that the law does not give power to the Federal Government to collect VAT and share to the states, arguing that VAT should be under the state.
“The move by the FIRS to go to the National Assembly means we are on course and that something was wrong from the beginning,” Akeredolu said on a programme on Arise News.
It is constitutional amendment they are pursuing and I can bet with you, it is dead on arrival because more states will support us to kill such amendment in the state assemblies.
Governor Akeredolu said if the federal government was to collect VAT for states, it can only get percentage which the Federal Government can decide to share at the FAAC.
“You can only collect VAT on behalf of the states and hand their money over to them. You can only take percentage there for helping us to collect the money,” he declared.