It was victory for the 36 states and 774 local governments of the federation as the National Assembly on Tuesday rejected a proposal seeking to shift the collection of Value Added Tax (VAT) from the concurrent to the exclusive legislative list.
The resolution, which puts an end to the federal government’s plan to retain the collection of VAT, is however 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 (FIRS).
The regime of President Muhammadu Buhari, 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 FIRS 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.
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.
Bills for LGA, legislative autonomy scale through
The House passed Bill 1 to “abrogate the State Joint Local Government Account and provide for a special account into which shall be paid all allocations due to local government councils from the Federation Account and from the government of the state.”
It also passed Bill 2 to “establish local government as a tier of government and guarantee their democratic existence, tenure and for related matters.”
Bill 9 which sought to “provide for the financial independence of state Houses of Assembly and state Judiciary” also passed.
The House also passed Bill 17 which sought to “establish the federal revenue court and the revenue court of a state.”
States get powers to run prisons, airports
Also, the House passed Bills 30, 31, 32 and 33 to move airports; fingerprints, identification and criminal records; prisons (and re-designate it as Correctional Services); railway; and power generation, transmission and distribution from the Exclusive Legislative List to the Concurrent Legislative List, respectively.
Also passed was Bill 39 to “empower the Revenue Mobilisation Allocation and Fiscal Commission to enforce compliance with remittance of accruals into and disbursement of revenue from the Federation Account and streamline the procedure for reviewing the Revenue Allocation Formula.”
While Bill 44 is to “specify the period within which the president or the governor of state shall present the Appropriation Bill before the National Assembly or House of Assembly,” Bill 45 seeks to require the president or governors to submit the names of persons nominated as ministers or commissioners within 30 days of taking the oath of office for confirmation by the Senate or state House of Assembly.”
The House passed Bill 46 to include presiding officers of the National Assembly in the membership of the National Security Council; approved the establishment of a ‘State Security Council’ in Bill 47; and passed Bill 55 which sought to include former Heads of the National Assembly in the Council of State.