A federal high court in Port Harcourt recently ruled that states, and not the federal government, have the right to collect value added tax (VAT) and personal income tax.
The Lagos State Government says it is ready to take advantage of the court ruling. The government in Rivers state wants to do the same.
But the Federal Inland Revenue Service (FIRS), which collects taxes on behalf of the national government, disagrees.
“We are aware of the judgment and we applauded it,” Lagos information commissioner Gbenga Omotosho said.
“In a federation, that is the way it goes. In our pursuit of true federalism, it is a giant step forward.
“And, in fact, we have notified all our stakeholders about the judgment that the Lagos State Government will implement it.
“We are writing to all the stakeholders to let them know that this is a judgment we are going to obey to the letter.”
Asked when it would take effect in the state, he said, “We are working on it. It is a matter of law.
“(It will commence) very soon except if we will be sending a bill to the House of Assembly to officially notify the Assembly about the judgment and adjust our own law that will compel those who pay VAT to the state government in obedience to the judgment.”
The move could boost internally generated revenue (IGR) for states but take a toll on federal income.
