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BUSINESS & ECONOMYNEWS

VAT Collection Bill Scales Second Reading at Lagos Assembly

Report: Kano State Generates N24bn Revenue In VAT - Earns More Than Entire South-East States

A bill seeking to empower the Lagos State Government in the collection of value-added tax (VAT) has passed the second reading in the Lagos State House of Assembly.

The lawmakers asked the committee on finance in charge of the bill to give feedback to the assembly on Thursday.

On Monday, the Speaker of the House, Mudashiru Obasa, stated that the VAT bill would enable the state to generate more revenue and improve infrastructure development.

On August 19, the Governor of Rivers State, Nyesom Wike, assented into law a bill on value-added tax (VAT) collection in the state.

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A federal high court sitting in Port Harcourt had issued an order restraining the Federal Inland Revenue Service (FIRS) from collecting VAT and personal income tax (PIT) –- thereby authorizing the Rivers state government to handle the collection.

The Speaker of the Lagos State House of Representatives asked the Lagos government to explore all legal options in ensuring that the judgement of the court in Port Harcourt is sustained up to the supreme court.

He decried the fact that, despite generating about N500 billion annually on VAT, the state got paltry amount from the federal government.

“It is an opportunity for us to emphasize again on the need for the consideration of true federalism,” he added.

Obasa stated that the VAT bill, when passed into law, will enable the state to address challenges in various sectors.

The FIRS had filed a stay of execution and advised the public to maintain a status-quo on the payment of the taxes following the landmark judgment of the federal high court.

On Monday, the Rivers state government announced that the court dismissed the FIRS’s application on stay of execution on VAT collection.

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The Rivers state government noted that the court’s ruling was based on the premise that “granting the FIRS application for a stay of execution would negate the principle of equity.”

Apart from Rivers state, the Lagos state government had directed the FIRS to stop issuing demand notices for payment of VAT and to render accounts, within seven days, of all sums collected as VAT in the current accounting circle in the state.

The FIRS had also vowed to continue to collect VAT until the appellate court reaches a judgment on the dispute.

About Author

Victor Okeh is a graduate of Economics from Lagos State University. He is versatile in reporting business and economy, politics and finance, and entrepreneurship articles. He can be reached via – [email protected]

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