The clash between states and the federal government over the issue of who should collect the Value Added Tax (VAT) is still lingering.
Image credit: BBC
Leading that move to stop the federal government from collecting VAT in states is Governor Nyesom Wike of Rivers State. However, Wike has got the strong backing of Governor Babajide Sanwo-Olu of Lagos State who has joined him to sign the law and fight the legal battle against the federal government. Surprisingly, Wike and Sanwo-Olu had to approach the Supreme Court on the issue despite the fact that the Court of Appeal has not decided on it by delivering its judgment. Many Nigerians will want to know why this happened. This article will discuss the issue.
Why Wike and Sanwo-Olu approached the Supreme Court.
First, they took the matter to Supreme Court to oppose the initial order of the Court of Appeal which ordered for a stay of execution. A report by The Punch made this clear adding that Wike and Sanwo-Olu are against the stay of execution order given by the Court of Appeal as demanded by the federal government through the Federal Inland Revenue Service (FIRS).
Image credit: The Guardian
FIRS is the federal government agency that collects the VAT from all states in Nigeria. Granting the stay of execution in line with the demand of the federal government did not go down well with Wike and Sanwo-Olu and that was why they went to Supreme Court with a view to getting the Apex Court to vacate the order. If that is done, then they can then go on to collect the VAT pending when the main suit has been decided.
Image credit: The Punch
Second, Wike and Sanwo-Olu went to Supreme Court over the issue because the Court of Appeal is taking time to give a judgment on the main suit. Wike and Sanwo-Olu planned to start collecting VAT this month of September, 2021. But, the stay of execution order came and stopped them from doing that. They felt that the Court of Appeal would give the suit accelerated attention and deliver judgment since it is a serious matter involving states and federal government. But, that did not happen.
Image credit: Premium Times
The Court of Appeal had fixed September 16th to hear the suit, yet no judgment has been given in the main suit. Sensing the danger of delay in the matter, Wike and Sanwo-Olu decided to approach the Supreme Court to get the stay of execution vacated so that they can collect VAT while waiting for the judgement in the main suit to be delivered. This is a wise move by the wo Governors. If things work in their favour, then they can be collecting the VAT while the wait continues.
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