Sanwo-Olu Signs VAT Into Law; As Appeal Court Stops Rivers State

By Akinwale Kasali

Just like his Rivers State counterpart, Nyesom Wike, Governor Babajide Sanwo Olu of Lagos State has signed the Value Added Tax, VAT, to be collected by the State into law.

The Lagos State House of Assembly, on Wednesday passed it into Law, and the Speaker, Mudashiru Obasa immediately asked the Ag. Clerk of the Assembly to send a clean copy of the Bill to the Governor for his assent. He did on Friday September 10, 2021, thus making Lagos the second State to take the bull by the horn.

However, this came on a day  a three-Court of Appeal panel, sitting in Abuja, stopped the Rivers State Government from implementing its new VAT law, and asked it to return to statusquo until the substantive case is decided.

Wike had, on Thursday, August 19, 2021, signed into law the bills on Value Added Tax (VAT) collection and Open Grazing Prohibition in the state after a Federal High Court sitting in Port Harcourt declared an illegality the collection of VAT in states by the Federal Inland Revenue Services (FIRS) on behalf of the Federal Government.

The two bills were passed after unanimous votes by the Lagos lawmakers at the sitting where they were read for the third time.

Obasa had directed the Acting Clerk, Olalekan Onafeko, to send the copy to Governor Sanwo-Olu for further action.

The Governor did exactly that  Friday by signing the “bill for a law to impose and charge VAT on certain goods and services” after returning from an official trip to Abuja.

The Court of Appeal said that the judgment of the Rivers State High Court which authorised State to  collect the tax be not implemented.

Issuing the order, Justice Haruna Simon Tsanami directed that the law passed by Rivers State House of Assembly and assented to by Governor Nyesom Wike be not implemented.

The Appeal Court  granted status quo ante in favour of the Federal Inland Revenue Services FIRS and against the respondents, Rivers State.

The case is scheduled for September 16 for a hearing of the motion for joinder by Lagos State.

FIRS, in an appeal marked CA/PH/282/2021, is praying the court to set aside the judgment of a Rivers State High Court which granted powers to the state to collect Value Added Tax, VAT.