Pan Yoruba socio-political organisation, Afenifere, has
hailed the decision of a Federal High Court sitting in Port Harcourt which held
that the Rivers State Government had the powers to collect Value Added Tax
generated within its territory.
The group said the judgement of the court enhances true
federalism and therefore advised the 36 states to step up constitutional
actions to be free from the actions and policies of the Federal Government
which are impeding the practice of true federalism in Nigeria.
In a statement on Thursday, Afenifere National Publicity
Secretary, Jare Ajayi, commended the Rivers State Government for initiating the
legal process and called on other states to explore areas in the Constitution
to deepen true federalism in their domains.
The statement was titled, ‘PH Court’s Ruling On VAT Enhances
True Federalism, Afenifere Says’.
Recall that the Federal High Court
sitting in Port Harcourt last month in a judgment in suit number
FHC/PH/CS/149/2020, held that the Rivers State Government had the powers to
collect VAT within its territory.
Although the Federal Inland Revenue Service applied to the
court for a stay of execution, Justice Stephen Pam rejected the application,
saying granting it would negate the principle of equity.
Governor Nyesom Wike, who lamented the injustice in the
country, had said that the Rivers State generated N15bn VAT revenue in June
this year, but got N4.7bn in return, while Kano generated N2.8bn in the same
month and got the same N2.8bn back.
Wike had also assented to the Rivers State Value Added Tax
Law 2021 in August after it was passed by the state House of Assembly.
Some states have since followed with the Lagos State House
of Assembly on Thursday passing the Value Added Tax Bill, which Speaker
Mudashiru Obasa directed that the Acting Clerk of the House, Olalekan Onafeko,
transmit a clean copy of it to Governor Babajide Sanwo-Olu for assent.
VAT is a consumption tax paid when goods are purchased and
services are rendered. It is charged at a rate of 7.5 per cent.
In its statement, Afenifere “called on the state governments
to use the opportunity provided by these landmark judgments to explore other
areas that the Constitution empowers them to assert themselves as federalists.
In other words, they should step up actions that will liberate the states from
the stronghold of the federal government that has turned Nigeria into a Unitary
State – in contradistinction to the federal spirit prescribes by the
Constitution.
“They should be assured of Afenifere’s support as they give vent
to power devolution and entrenchment of true federalism in Nigeria.
“Areas in which the states need to assert themselves include
agriculture, health, education, electricity, physical planning, title
registration, registration and production of vehicle number plates and casino
licensing etc as Lagos State Government did in the past.”
The Pa Ayo Adebanjo led group also called on FIRS “to resist
the temptation to keep appealing the judgment that empowers states to collect
local taxes as such a step is another assault on the federal system that we are
supposed to be running.”
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