Yoruba socio-political organisation, Afenifere, has commended the decision of the Federal High Court in Port Harcourt which ruled that the Rivers State Government had the powers to collect Value Added Tax generated within its territory.
The group said the judgment of the court enhances true federalism and therefore advised the 36 states to step up carry out legal actions to be free from the actions and policies of the Federal Government.
Afenifere National Publicity Secretary, Jare Ajayi, in a statement on Thursday, said the Federal Inland Revenue Service was wrong for appealing the VAT judgment which actually brought more federalism to states.
The statement was titled, “PH Court’s Ruling On VAT Enhances True Federalism, Afenifere Says.”
Last month, the Federal High Court sitting in Port Harcourt in a judgment in suit number FHC/PH/CS/149/2020, held that the Rivers State Government had the powers to collect VAT within its territory.
Although the Federal Inland Revenue Service applied to the court for a stay of execution, Justice Stephen Pam rejected the application, saying granting it would negate the principle of equity.
Governor Nyesom Wike, who had lamented the injustice in the country, had also revealed that the Rivers State generated N15bn VAT revenue in June this year, but got N4.7bn in return, while Kano generated N2.8bn in the same month and got the same N2.8bn back.
Wike had also assented to the Rivers State Value Added Tax Law 2021 in August after it was passed by the state House of Assembly.
Meanwhile, some states have since followed suit with the Lagos State House of Assembly on Thursday passing the Value Added Tax Bill, which Speaker Mudashiru Obasa directed that the Acting Clerk of the House, Olalekan Onafeko, transmit a clean copy of it to Governor Babajide Sanwo-Olu for assent.
VAT is a consumption tax paid when goods are purchased and services are rendered. It is charged at a rate of 7.5 per cent.
In its statement, Afenifere “called on the state governments to use the opportunity provided by these landmark judgments to explore other areas that the Constitution empowers them to assert themselves as federalists. In other words, they should step up actions that will liberate the states from the stronghold of the federal government that has turned Nigeria into a Unitary State – in contradistinction to the federal spirit prescribes by the Constitution.
“They should be assured of Afenifere’s support as they give vent to power devolution and entrenchment of true federalism in Nigeria.
“Areas in which the states need to assert themselves include agriculture, health, education, electricity, physical planning, title registration, registration and production of vehicle number plates and casino licensing etc as Lagos State Government did in the past.”
The group led by Pa Ayo Adebanjo also called on FIRS “to resist the temptation to keep appealing the judgment that empowers states to collect local taxes as such a step is another assault on the federal system that we are supposed to be running.”