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Lagos Generates 55% Of Value-Added Tax In Nigeria, Gets Only 10%—Lawmaker Says State Will Implement VAT Law

September 13, 2021

The lawmaker, who represents Badagry II Constituency in the House, said this on Monday when he appeared as a guest on Channels Television’s ‘Sunrise Daily’ breakfast programme.

A member of the Lagos State House of Assembly, Setonji David, has opined that the state will go ahead with the implementation of its recently assented law on Value-Added Tax following a stay of execution by the Appeal Court in Abuja last Friday.

The lawmaker, who represents Badagry II Constituency in the House, said this on Monday when he appeared as a guest on Channels Television’s ‘Sunrise Daily’ breakfast programme.


Speaking on the television programme on Monday, David noted that the interpretation of the government of Lagos to the court ruling that they should 'maintain status quo' is that they should implement the VAT law in the state pending any order by the Appeal Court ruling otherwise.

David said, “In Lagos State, we have always clamoured for true federalism. This is a consumption tax from the people of Lagos and it should be domiciled in Lagos and used for the people of Lagos. There are so many hassles that have to do with federalism that we are practising.

“We generate over 55% of the VAT in Nigeria and we get a paltry sum of 10%. Is that fair for a population of over 24 million. We are happy that the Rivers State Government went to court and the court was very clear that VAT was supposed to be a state affair. We have no choice but to follow suit.”

Speaking on whether Lagos State would implement the VAT law despite the Court of Appeal’s ‘maintain status quo’ ruling, the lawmaker said, “The status quo is that we have enacted the law in Lagos and the law is in existence and I believe strongly that until another judgement is passed by the Court of Appeal to the extent that what we have done is wrong, the law subsists.

“By our own understanding, what subsists in Lagos is our own law, until that law is set aside by the Court of Appeal. So, as far as Lagos is concerned, VAT in Lagos will be collected by the Lagos State Government.”

He lamented that the state does not enjoy special status despite generating over half of the country’s VAT. David, however, said with the implementation of the VAT law in Lagos, the interest of small businesses has been taken care of by the law.

 “Anywhere we can get money to fund the infrastructural development of the state, we won’t hesitate to do it.

“The Lagos Internal Revenue Service is well-placed, doing excellently well and is well-equipped to collect VAT.”

He noted that though the FIRS has gone to court, there has been “no push back from the FIRS yet” to the state government.

On the prompt passage of the bill, he said: “It depends on the exigency of the situation, we have passed bills like that, there is nothing abnormal about it."

On Friday, the Court of Appeal in Abuja told Rivers and Lagos State governments to maintain status quo regarding collection of Value-Added Taxes.

Justice Haruna Simon Tsanami, in a ruling on Friday, directed that the law passed by Rivers State House of Assembly and assented to by Governor Nyesom Ezenwo Wike must be put on hold.

The judge gave the order hours before Governor Babajide Sanwo-Olu of Lagos State signed the law on VAT.

The appellate court’s decision followed an application by the Federal Inland Revenue Service (FIRS), seeking a stay of execution of the order of a Rivers State high court in the matter.

Wike recently signed into law the bill on VAT collection in the state.

He signed the bill which was recently passed by the state House of Assembly at the Government House, Port Harcourt.

He said the judgment of the Federal High Court sitting in Port Harcourt had sufficiently addressed the illegality perpetrated by the FIRS.

On Thursday, Lagos State House of Assembly also passed the bill after a unanimous vote by the lawmakers.

However, the court has issued an order of perpetual injunction restraining the FIRS and the Attorney-General of the Federation, Abubakar Malami, from collecting, demanding, threatening and intimidating residents of Rivers to pay to FIRS, personnel income tax and VAT.

Both Rivers and Lagos state governments have already enacted legislation to give effect to the judgment in respect of VAT.

An earlier application by the FIRS to the high court in Rivers to stay execution of the judgment was on Monday refused by Justice Stephen Dalyop Pam on the grounds that the application would negate the principle of equity as the state legislature had already enacted law on the VAT collection.

Politics Taxes