FG envisages an amicable settlement with the States


The federal government is considering an amicable settlement with the states on the impasse on the collection of value added tax (VAT).

Finance and National Planning Minister Zainab Ahmed revealed this Thursday when she appeared on “Politics Today”, a political program on Channels Television.

Ms Ahmed said the ongoing dispute could not resolve the disagreement, hence the need for a political solution between the center and the sub-nationals.

The Federal High Court in Port Harcourt, Rivers State, in a recent landmark judgment ruled that it was unconstitutional to Federal tax service (FIRS) to collect VAT and personal income tax in Rivers State.

As a result of the judgment, Rivers and Lagos states both signed separate laws that allow them to collect VAT.

On September 10, a three-member panel of the Court of Appeal headed by Haruna Tsammani ordered all parties to maintain the status quo.

Rivers State government is currently challenging Supreme Court appeals decision

In addition, the governors of the southern states, under the auspices of the Southern Governors Forum (SGF), at a meeting in Enugu, expressed their support for the collection of VAT by state governments.

In addition, the Federal Inland Revenue Services (FIRS) is reportedly seeking a constitutional amendment that would include VAT on the exclusive legislative list.

READ ALSO: Court of Appeal joins Lagos in legal showdown over VAT collection

Ms Ahmed said the tribunal would not come up with a solution, but the parties at the table would resolve the issue.

“I have to do it with care because these are issues in the courts, and | I am not supposed to talk about problems in court, ”said the minister.

“But I hope that this problem can be solved by sitting on the table, not on the pages of the newspapers, no disagreements in the courts, because it can be solved on the table.

“Yes, there will be a positive political solution. We are working on an amicable solution.

Despite the controversy and raging litigation, the federal government is targeting 2.2 trillion naira in VAT to fund the 2022 budget.

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