The Federal Government’s plan to retain the collection of Value Added Tax despite a Federal High Court ruling, hit a brick wall on Tuesday as the National Assembly rejected a proposal seeking to shift the collection of VAT from the concurrent to the exclusive legislative list, effectively leaving the decision to the Supreme Court which is hearing the matter.
A Federal High Court had last year ruled that states had the powers to collect VAT. However, the Federal Government opposed the ruling and continued to collect VAT while it projected that it will collect N2.2tn in 2022 through the Federal Inland Revenue Service.
The regime of the President, Major General Muhammadu Buhari (retd.), also incorporated VAT collection in its Finance Act 2021 and included it in its 2022 budget, a move that put the government on a collision course with the Southern Governors’ Forum.
Also, the Federal Inland Revenue Service was reported to have lobbied the National Assembly by sending a proposal to the House of Representatives seeking to move VAT collection to the exclusive list. Although the tax agency denied this claim, the National Assembly accepted the proposal and sent it to its constitutional amendment committee.
On Tuesday, the National Assembly, voted on 68 amendments recommended by the Joint Senate and House of Representatives’ Special Ad Hoc Committee on the Review of the 1999 Constitution.
44 senators vote against VAT on exclusive list, 41 in favour
A Bill for an Act to Alter Part I of the Second Schedule to the Constitution of the Federal Republic of Nigeria, 1999 to include Value Added Tax on the exclusive legislative list failed at the upper legislative chamber
A total of 95 senators registered to vote and 85 voted. While 41 voted in favour of VAT being collected exclusively by the Federal Government, 44 voted against it while no one abstained. In the end, the bill failed because it did not meet the minimum 73 votes.
In the House of Representatives, about 209 lawmakers voted to retain VAT on the concurrent list while 91 voted for it to be placed on the exclusive list.
LASG, A’Ibom hail N’Assembly
Reacting to the development, the Lagos State Government, which is a party to the suit before the Supreme Court and has passed a law on VAT collection, said the National Assembly deserves commendation.
The Commissioner for Information, Mr. Gbenga Omotoso, said any decision that would promote federalism should be commended.
He added, “I think the lawmakers have done well. If they have said now that the states have the right to collect VAT, it is good because that has been the question that the judiciary has been asked to answer, and if the Lagos State Government and some other state governments are pushing for this, at the National Assembly it is wisdom.
“It is the right way to go. I think they deserve kudos; they deserve applause because in my own view, it is a ‘no victor, no vanquished’ situation. It is good for democracy. It is a victory for the rule of law. It is a victory for equity, for justice. It is a victory for what is right as against what is not right.”
In a similar vein, the Akwa Ibom State Government said it was in support of any move that would expedite the country’s move towards true federalism.
The Commissioner of Information and Strategy, Ini Ememobong, described the National Assembly act as a move in the right direction.
He said “The state government, like other forward looking private and corporate citizens, is supportive of every attempt to increase the speed of our travel to true federalism. This act by the National Assembly is a march in the right direction. The government of Akwa Ibom State led by Governor Udom Emmanuel has been at the lead of this advocacy and therefore welcomes this development.”
VAT needs further review – Gombe
However, the Gombe State Government, which had previously kicked against states collecting VAT, said on Tuesday that the issue of VAT collection still needed to be reviewed further.
The Commissioner for Information, Julius Ishaya, said the latest development is more complex than a lot of people understand.
Ishaya said, “For us aside from passing it as a law, there will be a need for states to sit down and sort out things.
“For instance VAT is value added tax on goods and services. If you buy airtime, instead of it being done at the organisation’s head office, it is meant for them to separate it to know cards used around the Gombe area and remit the VAT to the state unlike what was obtained in the recent past.
“That is the complicated issue, there is more than meets the eye but it is not a simple thing as people expect. We will increase our productivity and other economic activities to make sure we attract value addition.”
Lawmakers reject pro-women bills
However, the gender bills failed to pass despite the fact that Aisha Buhari, the President’s wife had on Wednesday last week, stormed the Senate and House chambers in company with female ministers to lobby the lawmakers as the committee laid its report.
Also on Tuesday, Dolapo Osinbajo, wife to the Vice-President, Prof Yemi Osinbajo, accompanied by the Minister of Women Affairs, Pauline Tallen, observed as members of the House voted on the recommendations by the committee, and watched as the lawmakers voted against the gender bills.
The rejected proposals either failed to get the required two-third or four-fifth votes in the 360-member House or they were voted against by a majority of the lawmakers in both chambers.
In the Senate, a bill seeking special seats for women at the National Assembly and state Houses of Assembly failed to scale through. While 91 senators registered to vote on the bill, 30 voted for it, 58 against it and three abstained.
Similarly, the senators voted against a bill seeking affirmative action for women in political party administration. 91 registered, 90 voted out of the figure 34 voted yes, 53 no and three abstained. The bill which was meant to guarantee inclusivity of women in governance failed as it could not garner at 73 votes needed for it to be passed.
All the bills relating to women failed to pass but for the Speaker of the House, Femi Gbajabiamila, who veted Bill 68 which proposed a 35 per cent quota for women in the presidential and state cabinets.
When the House voted on the proposal electronically, 226 members voted for it, 70 voted against it while four others abstained.
Gbajabiamila, however, pleaded with the lawmakers to allow the last remaining gender related bill to pass.