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VAT: Is the directive of Senate President to FIRS first victory for northern states?

The crisis between the Federal Inland Revenue Service and state governments over the collection of Value Added Tax has continued to linger despite several interventions. 

Photo credit: PUNCH

The governments of Rivers and Lagos State who started the agitation for the state administration of VAT have all enacted laws in their states which will pave way for them to collect tax.

Photo credit: Vanguard

Although the Federal Inland Revenue Service had appealed the earlier judgment of the High Court sitting in Port Harcourt which prevented it from continuing with the collection of VAT in Rivers State.

The VAT crisis deepened when the Southern Governors' Forum during their last meeting in Enugu State adopted the state administration of VAT and backed the decision of Lagos and Rivers States.

Photo credit: Vanguard

However, many northern states are not in support of the decision taken by the southern Governors because the north appeared to be at the receiving end of the new policy if eventually implemented.

Many states in the north depend on the VAT collected from the southern states which are shared for all states by FIRS.

Photo credit: PUNCH

Some of the northern Governors like Inuwa Yahaya of Gombe had expressed concern that states with low VAT will find it difficult to cope if the new policy is allowed to be implemented. 

However, the north appears to have gotten its first victory as Senate President, Ahmed Lawan asked the FIRS to continue with the VAT collection. 

According to a report by Peoples Gazette, the Senate President told the FIRS to double up on its revenue collection including the Value Added Tax that is under contention. 

Photo credit: Daily Post

The Senate President directed the FIRS to continue with the VAT collection since the Supreme Court has not given any clear-cut judgment. 

This appears to be the first victory for many northern states which have been calling for a return to the status quo because of its negative effects on states with low VAT.

Recall that the controversy over VAT collection between state governments and FIRS has reached the Supreme Court. If Supreme Court ruling favors FIRS, the southern states may have no choice but to continue sharing VAT with northern states. 

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Federal Inland Revenue Service Lagos State Rivers Senate Southern Governors' Forum


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