VAT WAR IN NIGERIA
Ending the War over VAT SIMONKOLAWOLE! BY SIMON KOLAWOLE The evolution of Nigerian federalism has undergone major genetic variations in the last 20 years, but the war that has just broken out over the value-added tax (VAT) may become the turning point because of the potential impact on fiscal federalism and the political economy. On December 11, 2020, Justice Stephen Pam of the Federal High Court, Port Harcourt, Rivers state, had ruled — in a case brought by Mr Emmanuel Chukwuka Ukala, SAN, against the Federal Inland Revenue Service (FIRS) — that it is states, not federal government, that should collect VAT. He also held that the constitution lists the taxation powers of FG as covering only incomes, profits and capital gains. Although I am a novice in legal matters, Pam’s judgment looks very sound to me. There is nowhere in the constitution where VAT is mentioned, and since it is linked to consumption, that appears to be in the terrain of states. The judge also held that th...