In the upcoming Supreme Court case between Governor Nyesom Wike and the FIRS, over the issue of the collection of Value Added Tax (VAT), there are two possible outcomes. On one hand, there is the chance that the court will rule against the Governor and grant the Federal Government the right to collect VAT. On the other hand, Wike could triumph. As it stands now, there is an equal chance of things going either way, and this article seeks to explain why.
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The basis of Governor Wike's argument in favour of state collection of VAT, is that the 1999 Constitution has no provision enabling the Federal Government to do so. As he has pointed out, neither item 58 nor 59 of the second schedule of the Constitution gives the FG this power. It is this shortcoming that the House of Representatives has sought to fix by attempting to pass a bill, aimed at amending the law and enabling state governments to collect VAT.
Photo credit: Premium Times Nigeria.
But this argument by Governor Wike is also a double-edged sword. This is because, while the 1999 Constitution does not enable the FG to collect VAT, it also does not exclusively give states the right to do so, either. If it did, the House of Representatives would not bother to try to amend the constitution. This is also why no party for or against the motion of state collection of VAT has been able to provide any conclusive legal backing.
Photo credit: Premium Times Nigeria.
Recall that the Minister of Justice and Attorney-General of the Federation, Abubakar Malami, is in support of the Federal Government's continued collection of VAT. However, the event on which his hope for this outcome hinges, is the decision of the Court of Appeal in Governor Wike vs FIRS. The court had ruled that the status quo before the VAT dispute should be maintained. In other words, the FG should continue the collection of tax revenue from states.
Photo credit: Punch Newspapers.
So, as it stands now, everything depends on the decision of the Supreme Court, as the law is lacking in the area of VAT collection. Whatever judgment is reached will become a judicial precedent - a decision that must be followed in subsequent cases. As the late United States Supreme Court Justice, Oliver Wendell Holmes, once said, the law is the prophecy of what the court will do in fact, and nothing more pretentious.
What do you think about this article? Who do you think will win the Supreme Court case between Governor Wike and the FIRS? Tell us your opinion in the comments section below.
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