Lagos will implement a recent law that empowers it to collect value-added tax (VAT), a state lawmaker has said.
Setonji David, who represents Badagry II Constituency in the House, stated this on Monday when he appeared as a guest on Channels Television’s ‘Sunrise Daily’.
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.
Following Rivers State which signed its VAT bill into law last month, Governor Babajide Sanwo-Olu, last Friday, signed the State VAT Bill into law a day after it was passed by the Lagos State House of Assembly.
On the same day, Lagos asked to be joined as a respondent alongside Rivers State in the appeal filed by the Federal Inland Revenue Service challenging the judgment of the Federal High Court, Port Harcourt which ruled that Rivers should commence VAT collection.
Justice Haruna Tsammani of the Appeal Court had adjourned to September 16 to hear the application by Lagos and asked all parties to “maintain status quo”.
Speaking on the television programme on Monday, David said that Lagos would continue the implementation of the VAT law pending any order by the Appeal Court ruling otherwise.
“In Lagos State, we have always clamoured for true federalism,” he said.
“This is consumption tax from the people of Lagos and it should be domiciled in Lagos and used for the people of Lagos. There are so many hassles that have to do with federalism that we are practising.
“We generate over 55% of the VAT in Nigeria and we get a paltry sum of 10%. Is that fair for a population of over 24 million. We are happy that the Rivers State Government went to court and the court was very clear that VAT was supposed to be a state affair. We have no choice but to follow suit.”
Asked whether Lagos State would go ahead with the implementation of the law despite the Court of Appeal’s ‘maintain status quo’ ruling, the lawmaker said, “The status quo is that we have enacted the law in Lagos and the law is inexistent and I believe strongly that until another judgement is passed by the Court of Appeal to the extent that what we have done is wrong, the law subsists.”
Continuing, he said, “By our own understanding, what subsists in Lagos is our own law, until that law is set aside by the Court of Appeal. So, as far as Lagos is concerned, VAT in Lagos will be collected by the Lagos State Government.”
When further asked whether the state government would go ahead to implement its VAT law, David said, “Correct”.
The lawmaker lamented that the state does not enjoy special status despite generating over half of the country’s VAT. “Anywhere we can get money to fund the infrastructural development of the state, we won’t hesitate to do it,” he said.
The lawmaker, however, said that with the implementation of the VAT law in Lagos, the interest of small businesses has been taken care of by the law.
“The Lagos Internal Revenue Service is well-placed, doing excellently well and is well-equipped to collect VAT,” David noted, adding that Lagos assisted FIRS to develop its VAT collection through the deployment of the state personnel to Abuja.
The lawmaker said though the FIRS has gone to court, there has been “no push back from the FIRS yet” to the state government.
Commenting on the prompt passage and enactment of the VAT law in Lagos, David said the bill passed through the normal process though it was passed and signed into the law in less than a week.
“It depends on the exigency of the situation, we have passed bills like that, there is nothing abnormal about it,” he said on the prompt passage of the bill.
