The battlefield of the ongoing VAT war between the Rivers State and the federal governments has shifted to the Supreme Court. The Rivers State government is challenging the ruling of the Abuja Division of the Court of Appeal which ordered that both parties should maintain the status quo pending when the court decides otherwise.
The state government is praying the Supreme Court to order the hearing and determination of the substantive appeal by the Federal Inland Revenue Service (FIRS) by a fresh panel of the Court of Appeal.
The state is also asking the apex court to set aside the ruling of the appellate court that ordered it to stop the collection of VAT pending the determination of the FIRS' appeal.
Recall that the Rivers State government obtained a ruling from the state division of the Federal High Court (FHC), which declared it the rightful authority to collect personal income tax and VAT within its domain.
But last Friday, the Court of Appeal sitting in Abuja ordered the Rivers and Lagos authorities to stop collecting VAT pending the determination of the application filed by the FIRS.
This is the judgment that the Rivers State government is challenging at the Supreme Court.
The bone of contention in the matter is that the states that generate more VAT revenue into the federal purse feel hard done getting back far less from the federal government while states which generate less get far more. This was what prompted the Rivers State government to take the matter to court.
For instance, Rivers State Governor, Nyesom Wike, revealed that his state generated N15bn VAT revenue in June this year, but only got back N4.7bn. He added that Lagos State generated N46.4bn but received N9.3bn and further alleged that Kano State generated N2.8bn within the same period and got back the same N2.8bn as its VAT allocation!
A lot of Nigerians have been watching developments in the ongoing raging VAT row with keen interest. They want to see how the Supreme Court would resolve the imbroglio. Some Nigerians have hailed the FHC's ruling as a landmark judgment that would set the country on the path of the much-desired fiscal and restructuring. They say the judgment was revolutionary
Many have, therefore, commended Governor Wike of Rivers State for setting the pace on the VAT issue.Following the FHC's judgment, Lagos State took a cue from Rivers to enact its tax law last week. The state has even applied to join Rivers State as a co-defendant in the case before the Court of Appeal.
There are strong indications that Ogun, Edo, and Akwa Ibom states are considering the idea of enacting their tax laws as well.
Nigerians eagerly await the judgment of the Supreme Court on the matter to lay it to rest once and for all.
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