The Attorney-General of the Federation, Abubakar Malami (SAN),
has said that an out-of-court settlement and political solution cannot be ruled
out to resolve the ongoing legal tussle between the Federal Inland Revenue
Service and some state governments over the collection of Value Added Tax.
Malami stated this on Channels Television’s ‘Politics Today’
programme on Sunday which was monitored by our correspondent.
Malami’s comments came barely days after the Minister of
Finance, Budget and National Planning, Mrs Zainab Ahmed, noted that efforts
were ongoing on the issue but she did not give details as the matter was
subjudice.
Ahmed, in an interview on Thursday night, had said though
she was “not supposed to be talking about issues in court but I do hope that
this problem can be solved by sitting on the table.”
“There are a lot of efforts going on right now. As I said, I
don’t want to discuss it because it’s in court so I have to be careful. But
there will be a positive political solution. We are working towards an
out-of-court solution,” she had explained.
When asked on Sunday night whether there was any possibility
for a political solution or an out-of-court settlement for the VAT battle
between the FIRS and some state governments, the AGF replied, “Such
consideration is not rightly on table but as I rightly stated, you cannot rule
out any possibility.
“But as far as we are concerned in the Officer of the
Attorney General, there exists judicial proceedings going on and within the
context of that proceedings, we will address it squarely but if there is need
for further engagement in line and in tune with the tradition of engagement,
both judicial and otherwise, such possibility cannot be ruled out.
The Federal High Court
sitting in Port Harcourt, the Rivers State capital, had on August 9 ruled that
Rivers State and not the FIRS should be the authority collecting VAT and
Personal Income Tax in the state.
The FIRS then approached the Court of Appeal in Abuja to
challenge the judgement. It also wrote to the Senate to seek the inclusion of
VAT collection in the exclusive legislative list.
Following the failure of the FIRS to obtain a stay of
execution it sought from the appellate court to prevent the state government
from enforcing the verdict, the Rivers State Government enacted a law to
empower the state to collect VAT. The governor, Nyesom Wike, signed the bill
into law on August 19.
Lagos State, whose request for joinder as a respondent in
the suit before the Court of Appeal was also granted by the court, also enacted
its own VAT law. The governor, Babajide Sanwo-Olu, signed the bill into law on
September 10.
Meanwhile, after approving Lagos State’s request for joinder
as a party at the Court of Appeal, ordered all parties to maintain the status
quo on the matter, a ruling the Rivers State Government had approached the
Supreme Court to set aside.
The Court of Appeal also directed that the matter be moved
from Abuja to its Port Harcourt Division for further hearing. The court has yet
to decide on the substantive suit as of the time of filing this report.
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