VAT: Former Deputy Senate President Warns NASS

By James Orji

Senator Ike Ekweremadu has advised the National Assembly not to intervene in the legal battle between Rivers and federal government over the collection of the Value Added Tax, VAT. He said the legal tussle which is now at the Court of Appeal should be allowed to run its full course.

Ekweremadu, a former Deputy Senate President said any intervention by the lawmakers would be prejudicial.

He said this on the crest of the Court of Appeal ruling directing parties in the issue to maintain status quo ante.

Governor Nyesom Wike of Rivers stste, had a fortnight ago accused the Federal Inland Revenue Service, FIRS which collects VAT on behalf of the federal government of secretly writing a letter to NASS to amend the tax law to enable it have exclusive powers on collection of VAT.

If this is done, FIRS through the Tax Tribunal will have exclusive power to determine issue relating to tax collection.

Reacting to the issue, Ekweremadu who once served as the Chairman, Constitution Review Committee, CRC warned the NASS against undue intervention when the legal battle is already at an advanced stage at the appellate court.

He supports the Rivers and Lagos states which have already passed the law giving them powers to collect VAT in their respective states.

According to him, the legal tussle will settle the issue of equitable sharing of resources among states and federal government, adding that ‘the feeding bottle’ mentality where states depend mostly on federal allocation for survival must stop.

In a statement issued on Sunday by his media adviser, Uche Anichukwu, the senator representating Enugu said only  judiciary can reshape Nigeria’s federalism.

Ekweremadu said “I commend Governors Nyesom Wike and Babajide Sanwo-Olu, as well as the Rivers and Lagos Houses of Assembly for their courageous moves. It is by so doing that our Constitution or laws can be tested and our federalism strengthened.

“In April 2012, I delivered a lecture at the Osgoode Hall Law School, York University, Canada, entitled ‘Nigerian Federalism: A Case for a Review’ wherein I forewarned that Nigeria would surely run into stormy economic weather unless we reinvented our federalism, steering the country away from a military-imposed ‘feeding bottle federalism’ to one predicated on self-reliance, hard work, enterprise, and resourcefulness to catalyse national development and economic prosperity.

Many others have also made related calls. Unfortunately, few people were interested in what we were talking about.

“Although we achieved a number of successes, perhaps my worst experience at the helms of the constitutional amendment process was in the Seventh Assembly. We recorded the most elaborate amendments to our Constitution, including the rearrangement of the legislative lists to devolve more powers to the sub-national governments by moving certain items like aviation, railway, power, and stamp duty, among others to the Concurrent Legislative List. Unfortunately, the amendments were denied assent by the President,” he said.

Meanwhile, Mike Ozhekhome said the court of appeal ruling was misinterpreted to mean that it stopped Rivers state from collecting VAT. The senior Advocate of Nigeria, SAN said contrary to suggestions, what the appellate court means by its ,’status quo ante’ ruling is that the state should go ahead to collect VAT in line with the Federal High court, Port Harcourt earlier ruling, pending when a superior ruling is made on the issue.