VAT Tussle: FG Considering Out Of Court Settlement

Federal Government of Nigeria says it is considering political paths to resolve the ongoing value-added tax (VAT) tussle.

Gatekeepers News reports that the Minister of Finance, Budget, and National Planning, Zainab Ahmed, says the federal government is considering resolving the ongoing value-added tax (VAT) tussle out of court.

The Finance Minister made this known during an interview on Channels Television on Friday.

In the last few months, the Federal Inland Revenue Service (FIRS) and some state governments have engaged in a legal tussle over the jurisdiction of VAT collection.

Rivers and Lagos state governments who have taken the forefront in the tussle enacted laws and called for decentralisation of VAT collection, while some states want centralised collection.

This comes after the judgment of the federal high court in Port Harcourt restrained the FIRS from collecting VAT and personal income tax (PIT) in Rivers state.

Although the FIRS appealed for a stay of execution at the lower court, the court dismissed it on the basis that it would “negate the principle of equity.”

Consequently, FIRS went to the court of appeal where both Rivers and Lagos state were ordered to maintain the status quo over the collection of VAT until the determination of the suit.

The Rivers state government who showed dissatisfaction with the order filed the matter before the apex court. No date has been fixed for the hearing of the case at the supreme court.

Ahmed during the interview said the federal government was seeking a positive political solution to the issue.

“I have to do this carefully because they are issues in court, and I am not supposed to be talking about issues in court,” she said.

“But, I do hope that this problem can be solved by sitting on the table, not on the pages of newspapers, not disagreements in court because it is possible to solve it on the table.”

“There’s a lot of effort going on right now. I said I didn’t want to discuss it because it is in court so I have to be careful.

“Yes, there will be a positive political solution. We are working towards an out-of-court solution.”