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FG considers taking Rivers, Lagos states to Supreme Court over VAT collection

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FG considers taking Rivers, Lagos states to Supreme Court over VAT collection

The Federal Government has revealed that it is considering filing a suit at the Supreme Court in order to ensure a quick and permanent resolution to the ongoing dispute over Value Added Tax (VAT) collection between it and some state governments.

The reaction by the government follows the controversy that has trailed the Federal High Court Port Harcourt, judgement which empowered Rivers State government to collect VAT within its territory and not the Federal Inland Revenue Service (FIRS).

This disclosure was made by the Attorney General of the Federation and Minister of Justice, Abubakar Malami, on Wednesday, while chatting with journalists on the sidelines of the United Nations General Assembly in New York, United States, according to ChannelsTV.

What the Attorney General of the Federation is saying

Malami said, “The Federal Government had indeed taken cognisance of the fact that where there exists a dispute between a state and the Federal Government, it is the Supreme Court that should naturally have the jurisdiction to determine the dispute between the state and the federation.

“And we are taking steps to consider the possibility of instituting an action before the Supreme Court for the purpose of having this matter determined once and for all.”

He said that the Federal Government would like the case to be sorted out once and for all, adding that the FIRS would continue to collect VAT following the directive of the court of appeal for status quo to be maintained pending the determination of the substantive suit.

What you should know

Recall that on August 9, Justice Stephen Pam of the Federal High Court in Port Harcourt granted the Rivers State government the right to collect VAT, instead of the FIRS, paving the way for state governments to initiate the process to start VAT collection.

Governor Nyesom Wike and Babajide Sanwo-Olu, subsequently assented to the VAT Law, 2021 after they were passed by their various state houses of assembly. But the FIRS, which was displeased with the development, later approached the Court of Appeal in Abuja with a civil motion seeking a stay of the execution of the judgement granted by the court in Rivers, pending the determination of the case after a similar request was denied by Justice Pam of the Federal High Court Port Harcourt.

A three-man panel of the appellate court led by Justice Haruna Tsammani then directed all parties to maintain the status quo and refrain from taking action that would give effect to the judgement delivered by Justice Pam, pending the hearing and determination of the instant suit.

In its reaction, the Rivers State government filed an appeal at the Supreme Court to challenge the ruling of the appellate court.

It sought relief of the apex court to allow the appeal, set aside the decision of the appeal court, and dismiss the oral application for interim injection made by the FIRS and also reconstitute the panel sitting on the case.

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