Federal High Court judgement calls to question the constitutionality of VAT, others – NSGF

…Says VAT is confused with SALES TAX

Abiodun OBA

Northern States Governors’ Forum (NSGF) has noted that “the judgment of the Federal High Court calls to question the constitutionality of VAT and other related taxes.

The northern governors, in a resolution read by its chairman and governor of Plateau State, Simon Lalong, in Kaduna,  at the end of an emergency meeting of the forum said, “as responsible leaders, they are constrained by the fact that the matter [VAT] is subjudice.” 

NSGF, however, said, “Rivers and Lagos state governments had enacted their own VAT laws and the Southern Governors’ Forum have expressed support for this course of action. 

“VAT is being confused by state government as a sales tax. If every state enacted its own VAT law, multiple taxation will result to increase in prices of goods and services and collapsed inter-state trade. 

“VAT is not a production tax like excise, but terminal tax which is paid by the ultimate consumer.” 

It noted that, “The reason Lagos account for our 50 per cent VAT collection is because most of the telecommunication companies, banks, manufacturing and other trading activities have their headquarters in Lagos with the resultant and wrongful attribution of VAT.” 

Thus, the forum noted that until and unless the Supreme Court pronounces judgment on the substantive matter between Rivers State and Federal Government, the matter is sub judice and the Northern States Governors’ Forum would respect this. 

The forum further described the position of their southern counterparts that power should shift to the South in 2023 as against the spirit and letter of the nation’s constitution. 

NSGF reiterated that though some northern state governors had earlier expressed views for a powershift to three geopolitical zones in the South, the forum unanimously condemned the statement by the Southern Governors’ Forum that the presidency must go to the South, saying, the statement was contradictory with the provision of the 1999 Constitution (as amended). 

“The statement is quite contradictory with the provision of the Constitution of the Federal Republic of Nigeria (1999) as amended that the elected President shall score the majority votes; score at least 25 per cent of the votes cast in two-third states of the Federation. In the case of runup, simple majority win the election,” it said. 

On prevailing security situation in the region, the governors called for a sustained synergy and coordinated efforts between the Federal Government and northern states, noting that such collaboration would produce outstanding results. 

The forum lauded the ongoing onslaught against banditry, kidnapping and Boko Haram insurgency, especially in the North-East and parts of North-West and North-Central states, as it encouraged the armed forces and other security agencies to sustain the tempo to enable the security challenges be permanently addressed in the shortest time. 

On grazing, the forum called on the Federal Government to expedite action on the well-established National Livestock Transformation Programme (NLTP) as a springboard in transiting from the open grazing system as widely practised in the North. 

According to the statement, the traditional rulers’ council appreciated the efforts made so far by the forum in addressing the key areas of challenges facing the northern states, as they expressed their willingness, solidarity and collaboration with the governors in addressing the challenges, particularly the issue of security. 

It was equally resolved that perpetrators of crimes should be dealt with, irrespective of their status in society. 

Reacting to the position of the Northern States Governors’ Forum on power shift, the chairman of the Southern Governors’ Forum and Ondo State Governor, Mr Rotimi Akeredolu, said the northern governors are entitled to their opinions. 

Speaking through Commissioner for Information and Orientation, Donald Ojogo, he said the northern governors had expressed their opinion and should not be crucified. 

Recall that the Court of Appeal had ruled that status quo be maintained in the collection of VAT, with the Attorney-General of the Federation (AGF) and Minister of Justice, Abubakar Maklami, speaking at the recently-concluded United Nations General Assembly (UNGA) in New York that FIRS will continue to collect VAT, following the ruling.