The Nigerian Senate has opposed the inclusion of Value Added Taxes (VAT) on the exclusive legislative list. This is according to a Senate disclosure on Tuesday’s plenary session.
This is tandem in time with the States and Federal Government movement to the Supreme Court over the collection of Value Added Taxes in States.
This issue preceded the VAT controversy between states and Federal Government last year September on the matter of who is meant to collect VAT, in which, the Fiscal Policy Partner and Africa Tax Leader at PwC, Taiwo Oyedele revealed, “The Federal High Court says within the states, any consumption tax is a tax for the states to collect.”
The Senates Precept
The Senate during a plenary session voted on a bill, which is intends to alter the Part 1 of the Second Schedule to the Constitution of the Federal Republic of Nigeria, 1999 to include Value Added Tax on Exclusive Legislative List and for related matters.
The Senate in its voting, therefore recorded more oppositions on the inclusion of the Value Added Taxes on the exclusive list as compared to those who were in favour of it as the vote turned out to be 41 Nays and 44 Ayes.
Key takeaway
Recall the issue on VAT in September 2021 on who should be collecting the VAT, after some states revealed that they contribute a lot more than they are getting from the tax pool. Hence, equitable and fair disbursement is needed.
In addition, last year, the Rivers State Governor, Nyesom Wike, insisted that the state government would go ahead with its move to stop the Federal Government from collecting Value Added Tax (VAT) from the oil-rich states.
The Nigerian Governors Forum (NGF) had also revealed that it will be patient regarding the Supreme Court’s decision on Value Added Taxes before taking any verdict on the matter.
Thus, the NGF urged the Supreme Court to accelerate its decision so that there will be a clarity over the issue of who should be in charge of VAT, either, the Federal Inland Revenue Service or the States.
