A former Deputy Senate President, Senator Ike Ekweremadu, has called on the his colleagues in the 9th National Assembly to stay away from any legislation over the collection of the Value Added Tax, VAT, and Stamp Duties, by State Governments, learnt, on Sunday.
He said that allowing the courts to fully determine the pending matters relating to VAT and Stamp Duties before it, could be a major step towards strengthening Nigeria’s Federalism.
Senator Ekweremadu made the call in a statement by his Media Adviser, Uche Anichukwu, titled: “Feeding Bottle Federalism: Allow VAT legal battle run full course – Ekweremadu”.
He also demanded an expeditious hearing of the VAT and Stamp Duties suits pending in the courts.
Recall, that the FIRS had in a desperate bid to retain the sole right for the collection of VAT, as well as jurisdiction over all Tax related matters, had written to the National Assembly, in July, seeking for the inclusion of VAT collection in the Exclusive Legislative List, in the 1999 Constitution, as amended.
It also requested for the approval of the establishment of the Federal Revenue Court of Nigeria, which would have the exclusive powers to adjudicate on Tax matters in the country.
Reacting however, Senator Ekweremadu argued that any Constitution amendment to transfer VAT collection to the Exclusive Legislative List, as reportedly requested by the Federal Inland Revenue Service, “would amount to changing the goal post in the middle of a game”.
His words: “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’.
“On the occasion, 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.
“This I believe, will catalyse national development and economic prosperity.
“Many others have also made related calls. Unfortunately, only a 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 Constitution 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 subnational governments by moving certain items like Aviation, Railway, Power, Stamp Duties, among others, to the Concurrent Legislative List. Unfortunately, the amendments were denied assent by the President.
“But as a Lawyer and Lawmaker, I know that case law or judicial precedent, is also a veritable source of Law.
“So, I think we should allow the Constitution and the Laws of our land to be tested in the Courts of Law.
“It is untidy for the Presidency or its Agency to come through the backdoor to seek legislative intervention in its favour on the same matter that is prejudice.
“The ball is now in the court of the Judiciary, and all we should seek at this juncture is an expedited and courageous adjudication of the lawsuits.”
Speaking further, Senator Ekweremadu called on all State Governors to look inwards to boost their revenues, since every part of the country has what it takes to prosper, if the Leaders are ready to move ahead and generate wealth.
He stated: “The bottom line of the raging tax ‘war’ is that having unwittingly killed industry, having elevated our nation to an oil dependent economy, and consequent upon the collapse of oil price amid other sources of energy, our economy is virtually collapsing, the naira has crashed to an all-time low, and the nation has come to rely more and more on taxes.
“Inevitably, some States have now begun to question some practices they feel fly in the face of federalism and justice, among them the collection and distribution of VAT and other taxes.
“VAT is essentially a consumption tax, and what States like Rivers and Lagos are saying in essence, is that the Federal Government cannot continue to rob them of taxes paid on goods and services consumed in their States.
”Some are with environmental and social consequences that they have to deal with, only to withhold, as well as transfer a large chunk of such revenues to other States.
“The major takeaway from our ailing economy, collapse of the naira, and VAT and stamp duty imbroglio, is that our feeding bottle strand of federalism is no longer sustainable.
“We must diversify and expand our economy now; and there is no other way than to remake our federalism to enable States to harness and unleash their endowments and comparative advantages.
“Rather than begrudge States like Rivers and Lagos, all federating units should be encouraged and enabled to look inwards to reinvent themselves.
”They should be encouraged to boost their respective competitiveness through improved security, human capital development, industry, and building of egalitarian and cosmopolitan societies.
“This would enable them to attract more investments and economically viable populations.
“That is how federations are meant to function.”