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Expert cautions Wike against using Rivers’ task force to collect VAT

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A Public Affairs Analyst and Lawyer Liborous Oshoma has urged Rivers State Governor Nyesom Wike to avoid using the state task force to collect value added tax (VAT) as he vowed on Wednesday.

Oshoma said though the federal police could compromise their integrity, the governor had federal police officers among his security.

The officers also guarded government institutions in the state, he said. 

Featuring on Arise TV’s ‘The Morning Show’ on Thursday, Oshoma said the Federal Inland Revenue Service (FIRS) and Rivers State Government should approach the raging crisis between them over who collects consumption tax in the state with tact.

He said rather than use a state-funded task force, Wike should use the police “even though the commissioner of Police in the state reports to the IG (Inspector-General of Police). Yet, we have never seen situations where state governors will say that they requested for police support in time like this and such request was refused by the commissioner.”

However, The ICIR reports that Oshoma’s claim may not be entirely true.

A former Commissioner of Police in Rivers State Joseph Mbu reportedly, was at various times at loggerheads with the then Governor of the state Rotimi Amaechi.

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What made Mbu and Amaechi’s case more interesting was that the former governor was a member of the People’s Democratic Party (PDP) – the party at the federal level at the time.

Amaechi later decamped to the All Progressives Congress (APC) before becoming a cabinet member in President Muhammadu Buhari’s government in 2015. 

In his advice, Oshoma said Wike should consider the effects of whatever option he would use to collect the VAT on business owners in the state.

He, however, warned that the insistence of the Federal Inland Revenue Service (FIRS) to collect the VAT was an invitation to anarchy.

He said the FIRS had been collecting VAT wrongly because the country’s policies reflected monarchical system “where the king can do no wrong.”

According to him, there was no law backing the collection of VAT by the federal agency. 

He said the Federal High Court invalidated Section One, Two, Three and 12 of the VAT Act, which gave Rivers State the powers to collect VAT, on the ground that the sections conflicted with some positions of Section Four of the 1999 Constitution.

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He said realising previous court judgments in favour of individuals, and against the FIRS, the agency had secretly written a letter to the National Assembly asking the lawmakers to amend the constitution to include the VAT. 

“But, unfortunately, that issue has not been dealt with by the National Assembly before the Attorney-General of Rivers State and the FIRS (began their current feud). What I think the states should do is: let all the attorneys-generals join in that suit. 

“It ought to ordinarily should have started with the Supreme Court, being a constitutional matter and interpretation. All the state attorneys-generals should have joined in the suit and then challenged that Act vis-à-vis the provisions of Section Four of the constitution.”

He said the restructuring that different nationalities clamoured for might not come from amending the constitution but from interpreting the nation’s laws.

He also appealed to courts to be unanimous in issuing orders, stop making conflicting judgments and “refuse to be used by the Federal Government to do dirty jobs.” 

Reacting to Wike’s allegation that the Federal Government was attempting to move FIRS’ appeal on the ruling by Federal High Court on VAT from Rivers State to Abuja, Oshoma said available evidence showed the FIRS lacked the power to collect the revenue. 

“Any attempt to move that matter from where it is to a court that will be favourably disposed to granting judgment to one party will automatically take away the already non-existence or the whittled-down influence of the judiciary, in as much as democratic practice is today in Nigeria,” he cautioned.

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He, nevertheless, expressed faith in the President of the Court of Appeal Monica Dongban-Mensem to do just justice to the matter.

He called on all the state governors to resist the FIRS’ effort to defy the court’s order on the matter.

According to him, the impasse implied that any governor coming to office must be ready to work.

He said many states had become lazy because they collected free monthly allocation from the Federal Government.

He said he had expected the Buhari government to correct the ‘anomaly’ in how a state like Kano would destroy bottles of beer and other alcoholic drinks, yet collected VAT paid to other states on the same products at the end of the month from the Federal Accounts Allocation Committee.

Rift over the VAT collection took a new twist on Wednesday after the Rivers State government met with and read the riot act to business owners and other investors, charging them to stop paying VAT to the Federal Government.

FIRS also rushed to hold a press briefing in Abuja, directing the taxpayers to continue to pay the consumption tax into its coffers.

Rivers State assumed the power of collecting VAT after FIRS lost its bid to secure a stay of execution on an earlier court ruling empowering the state to collect the tax on August 6.

A Federal High Court sitting in Port Harcourt, the state capital, dismissed the FIRS’ suit number FHC/PH/CS/149/2020 and reaffirmed the earlier order that the state governments should collect VAT and not the federal agency.

The court had, in August, empowered Rivers State government to collect VAT.

On Thursday, the Lagos State House of Assembly passed a similar bill empowering the state to collect VAT.

The bill also banned the open grazing of cattle in the state.

Lagos State alone accounts for an estimated 55 per cent of VAT, according to financial experts. The state is followed by Rivers.

The two states contribute over 70 per cent of collectable VAT in the country.

 

 

 

 

 

 

 

 

 

 

 

 

 

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