By Kassim Omomia
There are indications that the National Assembly may shun any planned request by the Federal Inland Revenue Service (FIRS) to include the controversial matter of the Value Added Tax (VAT) in the exclusive legislative list.
In a desperate bid to retain the collection of the VAT, the FIRS on July 1 rote the National Assembly, seeking the inclusion of VAT collection in the exclusive legislative list.
Specifically, the FIRS wants the National Assembly to vest, exclusively, all adjudication of tax disputes, including federal tax laws, companies income tax, petroleum tax, income tax, capital gain tax, stamp duty, VAT, taxes, levies, and other laws, regulations, proclamations, government notices and rules on it.
Rivers State on August 10 secured a judgement restraining the FIRS from collecting VAT and the matter is ongoing at the Court of Appeal, but the appellate court had temporarily halted the Rivers State government from collecting VAT until all legal disputes relating to the matter are resolved.
But ThisNigeria learnt exclusively yesterday that the request by the FIRS might be ignored as the National Assembly prepares for another round of public hearings on constitution amendment.
This position was contained in the submitted report of the zonal public hearings conducted in the six political zones by both chambers of the National Assembly, which was sighted ThisNigeria.
Already, the Organised Private Sector of Nigeria (OPSN) in Lagos is calling on the Federal Government to urgently make a pronouncement on the ongoing controversy over VAT payment. This, it said, would enable businesses to know what to do.
However, speaking on the report already submitted to the House, a top member of the Ad-hoc Committee on Constitution Review, who did not want his name mentioned, said, “The House of Representatives did not and was not planning to smuggle any proposal written by the FIRS to have VAT included in the exclusive legislative list.”
It was gathered that FIRS wrote to both the deputy speaker of the House who doubles as chair House of Representatives constitution review committee and his counterpart in the Senate and deputy senate President
“Both offices and committees were equally copied,” he added.
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Reports from zonal hearings ready, another soon
Meanwhile, a credible source familiar with activities of both Ad- hoc committees on the review of the 1999 Constitution told ThisNigeria that the reports have been compiled.
Recall that both the Senate and House of Representatives, engaged in zonal public hearings in the country to elicit views from Nigerians between May and June earlier in the year ahead of alteration of the constitution
The source disclosed that a date for the national public hearing where more views are to be debated, in addition to reports already collated will be announced soon
According to him, issues bothering on the demand for additional states, local government autonomy, power shift among the zones, instead of the north and south power rotation model that is currently in place, were canvassed in most submissions made to the committees
It was learnt that the committee still receives fresh submissions, which will be opened till the national public hearing is concluded.
ThisNigeria gathered that the draft copies of the National Assembly position will be transmitted to the states for concurrence or otherwise before the National Assembly members embark on Christmas break.
Sector wants FG’s directive over VAT payment
Meanwhile, the Chairman of OPSN, Mr Taiwo Adeniyi, has raised concerns over the delay in addressing the impasse over the collection of VAT.
The body said the situation could cause negative effects on businesses, most especially in the collection and remittances of VAT.
Adeniyi said, “We are aware that by September 21 we get penalised if we do not pay or remit the VAT for August.
“We are also aware that laws are not made in retrospect. It then means that even if those laws have been enacted, particularly the Lagos State law which came into effect in September, it will not affect the payment by businesses in the state.
“Due to our remittances, we have issues with the fact that the law for Rivers was made in August and the majority of the businesses in Lagos usually will have a relationship with the Rivers State Inland Revenue too.
“The confusion in the public space is the reason we are calling on the government to come to our aid as we want to pay. “It is for the government at the centre to make a pronouncement as to what becomes of us,’’ he said.
Adeniyi, who is also the President of Nigeria Employers Consultative Association (NECA), said that the ongoing challenge had the potential to make businesses pay double VAT because of demands by the FIRS and state governments.
He said that businesses, as the collecting agents, were practically unclear on the authority to remit to, and without a clear path, this would further aggravate the pain on businesses.
“It is a popular saying that where two elephants fight, it is the grass that suffers. “It is no longer news that Nigerian businesses have been battling with myriads of challenges, making the survival of enterprises and ease of doing business in the country among the worst in this part of the world,” he said.
The News Agency of Nigeria reports that there has been controversy over the collection of VAT after a Federal High Court ruled that it was not the duty of the Federal Government to collect the tax.
VAT is normally collected by the Federal Government since the military era and the money is shared by the three tiers of government. Following the court ruling, however, Lagos and Rivers states passed laws that allowed them to collect VAT.
FIRS, which used to collect the VAT on behalf of the Federal Government, has challenged the court ruling at the appellate court.
OPSN comprises the Manufacturers Association of Nigeria, the Nigeria Association of Chambers of Commerce, Industry, Mines and Agriculture, NECA, Nigeria Association of Small Scale Industries, and the Nigeria Association of Small and Medium Enterprises.
