The Nigerian Bar Association and prominent senior lawyers, on Thursday, warned the Federal Inland Revenue Service and the National Assembly against any illegality in their bid to amend the Value Added Tax law in the country.
The Publicity Secretary of the NBA, Rapulu Nduka, and Senior Advocates of Nigeria, Chief Mike Ozekhome, Ebun-Olu Adegboruwa and Afam Osigwe, gave the warning in separate interviews with our correspondents in response to the judgment of the Federal High Court sitting in Port Harcourt, which held that the Rivers State Government had the powers to collect VAT within its territory.
While the NBA urged the lawmakers representing the various states to be on the lookout for the request by the FIRS to include VAT on the Exclusive Legislative List, the SANs supported moves by the Lagos and Rivers state governments to take over the collection of the tax.
Following the court’s rejection of the FIRS’ application for stay of execution, the Rivers State Government ordered companies based in the state to start paying VAT to its revenue board.
On Thursday, The PUNCH reported that the FIRS had written to the National Assembly to seek the inclusion of VAT on the exclusive legislative list.
Nduka, in an interview with one of our correspondents, supported the judgment of the Federal High Court, saying it was valid.
He also said the FIRS could appeal the judgment, but stated that the National Assembly should be cautious with the request of the agency for the amendment of the VAT law.
He stated, “Firstly, the judgment of the Federal High Court regarding VAT, to the best of my knowledge, is a valid judgment. If the FIRS feels aggrieved, it can appeal to the Court of Appeal.
“On the issue of the FIRS requesting the National Assembly to amend the Constitution to put VAT collection on the exclusive legislative list, Nigeria is a country governed by laws and the NBA advocates the promotion of the rule of law.
“There are procedures for the amendment of aspects of the Constitution, which must be followed. We hope that our lawmakers do the right thing. Thankfully, we have representatives from all states of the federation.
“I will be surprised if the FIRS pushes for a distinct Federal Revenue Court, especially at this time.
“It really speaks volumes. We must recall that the Federal High Court used to be a revenue court. One would wonder if the proper response to an unfavourable judgment is to ask for new courts.”
Also, a legal practitioner, Kudos Okor, stated that VAT should not be collected by the FIRS.
He stated, “If you look at constitutional provisions, you will find out that a lot of the taxes paid to the Federal Government are actually supposed to be paid to the states.
“I believe the demand of the FIRS is inappropriate; it is only trying to extort Nigerians. I advise every state governor to kick against this demand. No state governor should allow the Federal Government to take what rightfully belongs to the state.”
Adegboruwa backs Rivers, Lagos on VAT laws
Adegboruwa also threw his weight behind the state laws on VAT in a statement on Thursday, saying, “State VAT law is a form of restructuring. It is restructuring and I support it 100 percent. We have been shouting and crying for this lopsided federalism to be made equitable.
“Those who make peaceful change impossible make violent change inevitable.”
Adegboruwa commended the Rivers State Governor, Nyesom Wike, for starting the revolution.
He also commended the Lagos State Governor, Babajide Sanwo-Olu; the Attorney-General of Lagos State, Moyosore Onigbanjo (SAN); and the Lagos State House of Assembly for their stance on VAT collection by the state government.
Meanwhile, members of the business community and the Rivers State Civil Society Organisation have backed Wike’s decision on VAT collection.
The President, Rivers Entrepreneurs and Investors’ Forum, Ibifuro Bobmanuel; and Chairman, Rivers State Civil Society Organisation, Enefaa Georgewill, gave the governor the backing in separate interviews with one of our correspondents in Port Harcourt on Thursday.
Bobmanuel, a financial expert, said when state governors realize that VAT would be paid directly to the states, they would begin to treat businesses with a lot of respect.
On his part, Georgewill lauded Wike for the courage to fight a cause, which he said was in order, adding that the present situation meant more revenue for the state.
Ozekhome, on his part, said states, by reason of the legislature, should not lose consumption taxes to the Federal Government.
Ozekhome made his position known in an interview with The PUNCH.
He said, “VAT is ideally a matter within the residual legislative list of states. It is a consumption tax collected by producers and manufacturers of goods and is then passed on to the ultimate consumers.
“Why, in a federal system of government such as we operate, should a state that harbours industries and companies lose the consumption tax to the Federal Government, which is a central government? It makes no sense at all.
“If the National Assembly makes the mistake of legislating on and including VAT as a matter on the Exclusive Legislative List, it can be lawfully challenged in a court of law. All the state attorneys-general should join hands together and sue on behalf of their various states.”
On his part, Osigwe said the call for the establishment of a special court was unnecessary, adding that it would further strain the nation’s economy.
He stated, “In Nigeria, we have this attitude of thinking that a court must be created for everything. We want courts created for economic and financial crimes, electoral offences and now revenue collection.
“The Federal High Court started as a revenue court and today, it has become a court of all jurisdictions.
“On VAT, for the FIRS to write to the National Assembly shows that it is too agreed that there is a need for clarification on VAT.
“The states had largely yielded power to the Federal Government until recently. I think the ongoing judicial process is a welcome development. We need to have some certainty on the matter.”
But the National Assembly said the FIRS, just like any other institution, group, or individual, had the right to seek an amendment to the country’s Constitution.
The Chairman, Senate Committee on Media and Public Affairs, Senator Ajibola Basiru, when asked to comment on the legality of the request of the tax agency, said the FIRS had not done anything illegal.
He, however, said the approval of such an amendment was not automatic because the request would pass through normal processes.
Basiru stated, “Every stakeholder has the right to make requests for the amendment of the constitution. However, whether the amendment will pass or not will depend on it passing through the requisite processes stipulated by Section 9 of the Constitution.
“I can’t express any personal opinion on the FIRS letter, because I’m a member of the Constitution Review Committee and the matter has not come before us.
Lagos hails Assembly over VAT bill passage
The Lagos State Government has hailed the passage of the Value Added Tax Bill by the state House of Assembly, saying it followed due process.
The state Commissioner for Information and Strategy, Mr Gbenga Omotoso, in an interview with one of our correspondents on Thursday, said the passage of the bill would benefit residents of the state.
He said, “The House has just passed the bill; it has not been returned to the executive. We are waiting for them to bring the bill for the governor to sign.
“I think the due process was followed; the bill went through various reading stages and there was a public hearing, where residents of the state made their views known on the bill.
“This is not the first bill that has been passed by the Lagos State House of Assembly. The executive has sent in about 40 bills since Governor Babajide Sanwo-Olu assumed office. This is just one of the bills. It is all about Lagosians, rule of law and true federalism. It is a matter of law, not emotions.”
The state House of Assembly had on Thursday passed the Lagos State Value Added Tax Bill.
According to a statement, the bill was passed during the plenary in which the lawmakers unanimously adopted the recommendations in the reports of the Committee on Finance as the resolutions of the House, leading to its third reading.
Tanzania: African Development Fund Approves $116 Million Loan to Upgrade Southern Road Corridor
The Board of Directors of the African Development Fund on Wednesday approved a loan of around $116 million to the Tanzanian government to upgrade a 160-km Mnivata-Newala-Masasi road corridor in the southern part of the country.
The Bank’s loan represents 98.71% of the project cost; the government of Tanzania will provide the remaining 1.29% in funding.
The project will upgrade the roadway, including the 84-meter Mwiti bridge, to bituminous standard. The works also have social components, including the provision of potable water, education and medical infrastructure, the establishment of cashew nut processing units, and extension of entrepreneurial training to women and youth.
The upgrade is expected to open up rural areas in the region and enhance the Mtwara Development Corridor, which links Mtwara Port and Mbamba Bay port on Lake Nyasa. Exporters, importers, small-scale cross-border traders, farmers, transporters are all expected to benefit.
“The periodic isolation of such a significant population worsens vulnerability and undermines social inclusion. Improved road connectivity would therefore build the resilience of the people and widen livelihood opportunities within the Mtwara Development Corridor and the surrounding districts,” Bank Director General for East Africa Nnenna Nwabufo said.
Overall, the five-year project will improve mobility and accessibility for about 1.1 million people in Mtwara, Tandahimba, Newala and Masasi districts and facilitate integration with neighbouring Mozambique, Malawi and Zambia.
Currently, the districts of Tandahimba and Newala, with an estimated combined population of 509,000 people, are mostly cut off, while connection with the Mtwara port area for essential supplies is severely constrained during rainy seasons due to the state of the road.
The project will advance Tanzania’s current five-year Development Plan (2021-2026) and aligns with the Bank Group’s Country Strategy Paper (2021-2025) which emphasizes sustainable infrastructure for a competitive economy and an improved private sector business environment for job creation, as well as two High-5 strategic priorities: Integrate Africa and Improve the quality of life for the people of Africa.
At 30 June 2021, the Bank Group’s active portfolio in Tanzania comprised 22 operations (19 public and 3 private) with a total commitment of about $2.4 billion.
FirstBank Expands Its International Money Transfer Network, Reinforces its Commitment to Customer Service
In furtherance of the need to expand diaspora remittance inflow into the country, First Bank of Nigeria Limited has increased its network of International Money Transfer Operators (IMTOs), targeted at easing the accessibility of its customers to receive money from close to 100 countries across the world in a safe and secured manner. With over 750 branches across the country, customers can receive money from the nearest FirstBank branch closest to them.
Over the years, FirstBank has been in partnership with Western Union, MoneyGram, Ria, Transfast, and WorldRemit. The bank is also in partnership with other IMTOs which include Wari, Smallworld, Sendwave, Flutherwave, Funtech, Thunes and Venture Garden Group to promote remittance inflow into the country, thereby putting Nigerians and residents at an advantage in receiving money from their families, friends and loved ones across the world.
Beneficiaries can receive remittance in US dollars in any of our over 750 branches spread across the country. Customers without an existing domiciliary account can have dollar account automatically created for their remittances. You can also receive inflow directly into your account through Western Union.
In addition, FirstBank has launched its wholly owned remittance platform named First Global Transfer product to promote the international transfer of funds across its subsidiaries in sub-Saharan Africa. These subsidiaries include FBNBank DRC, FBNBank Ghana, FBNBank Gambia, FBNBank Guinea, FBNBank Sierra-Leone, FBNBank Senegal.
Reiterating the Bank’s resolve in promoting diaspora remittances, regardless of where one is across the globe, the Deputy Managing Director, Mr Gbenga Shobo said “at FirstBank, expanding our network of International Money Transfer Operators is in recognition of the significant roles diaspora remittances play in driving economic growth such as helping recipients meet basic needs, fund cash and non-cash investments, finance education, foster new businesses and debt servicing.
We are excited about these partnerships, as it is essential to ensure our customers are at an advantage to receive money from their loved ones and business associates, anywhere they are, across the world.”
FirstBank pioneered international funds transfer and remittances over 25 years ago and has been at the forefront of promoting cross border payments in the country, having started the journey with Western Union Money Transfer. The Bank’s wealth of experience and operation in over 750 locations nationwide gives it the edge in the market.
Private Sector Seeks FG’s Directive on VAT Payment
The Organised Private Sector of Nigeria (OPSN) on Sunday in Lagos called on the Federal Government to urgently make a pronouncement on the ongoing controversy over VAT payment so that businesses will know what to do.
OPSN chairman, Mr Taiwo Adeniyi, made the call at a news conference and said delays in addressing the issue could cause negative effects on businesses, most especially in the collection and remittances of VAT.
“We are aware that by Sept. 21 we get penalised if we do not pay or remit the VAT for the month of August.
“We are also aware that laws are not made in retrospect. It then means that even if those laws have been enacted, particularly the Lagos State law which came into effect in September, it will not affect the payment by businesses in the state.
“Due to our remittances, we have issues with the fact that the law for Rivers was made in August and the majority of the businesses in Lagos usually will have a relationship with the Rivers State Inland Revenue too.
“The confusion in the public space is the reason we are calling on the government to come to our aid as we want to pay.
“It is for the government at the center to make a pronouncement as to what becomes of us,’’ he said.
Adeniyi, who is also the President of, Nigeria’s Employers Consultative Association (NECA), said that the ongoing challenge had the potential to make businesses pay double VAT in view of demands by the FIRS and state governments.
He said that businesses, as the collecting agents, were practically unclear on the authority to remit to and without a clear path, this would further aggravate the pain on businesses.
“It is a popular saying that where two elephants fight, it is the grass that suffers.
“It is no longer news that Nigerian businesses have been battling with myriads of challenges, making the survival of enterprises and ease of doing business in the country among the worst in this part of the world,’’ he said.
There has been controversy over the collection of VAT after a Federal High Court ruled that it was not the duty of the Federal Government to collect the tax.
VAT is normally collected by the Federal Government since the military era and the money is shared by the three tiers of government.
Following the court ruling, however, Lagos and Rivers states passed laws that allowed them to collect VAT.
FIRS, which used to collect the VAT on behalf of the Federal Government, has challenged the court ruling at the appellate court.
OPSN comprises the Manufacturers Association of Nigeria, the Nigeria Association of Chambers of Commerce, Industry, Mines and Agriculture, NECA, Nigeria Association of Small Scale Industries and the Nigeria Association of Small and Medium Enterprises.
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