Just as revealed recently by the Minister of Finance, Zainab Ahmed, the Federal Government is resolute on the path to seek a political solution to the lingering controversy on the authority enabled by the constitution to collect the Value Added Tax, VAT.
This reaffirmation is coming from Abubakar Malami (SAN); the Attorney-General of the Federation, in a recent interview where he assured that an out-of-court settlement remains a viable option for the government, stating that it cannot be ruled out to resolve the ongoing legal tussle between the Federal Inland Revenue Service and some state governments over the collection of Value Added Tax.
The statement of the Attorney General of the Federation reads thus;
“Such consideration is not rightly on the table but as I rightly stated, you cannot rule out any possibility.
“But as far as we are concerned in the Officer of the Attorney General, there exist judicial proceedings going on and within the context of that proceedings, we will address it squarely but if there is need for further engagement in line and in tune with the tradition of engagement, both judicial and otherwise, such possibility cannot be ruled out.
Malami’s statement is in close ties with that of the minister of Finance revealed a few days ago. Below the earlier statement of Zainab Ahmed; the Minister Finance:
“There are a lot of efforts going on right now. As I said, I don’t want to discuss it because it’s in court so I have to be careful. But there will be a positive political solution. We are working towards an out-of-court solution,”
Rundown of the VAT Legal Tussle
- On August 9th, 2021, a High Court Sitting in Port Harcourt had ruled that VAT away from its current collection realities should be in the purview of the State government.
- Following the judgement, the Rivers State Government had enacted a law to empower the state to collect VAT. The governor, Nyesom Wike, signed the bill into law on August 19.
- Also, the FIRS had written to the Senate to seek the inclusion of VAT collection in the exclusive legislative list.
- Lagos State also requested for a joinder as a respondent in the suit before the Court of Appeal was also granted by the court, following the enactment of its VAT law. The governor, Babajide Sanwo-Olu, signed the bill into law on September 10.
- The High Court judgement was refuted and appealed by the Federal Government in the court of Appeal which had ruled that all party maintains the status quo.