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“And we are taking steps to consider the possibility of instituting an action before the Supreme Court for the purpose of having this matter determined once and for all,” said Minister of Justice and Attorney-General of the Federation (AGF) Abubakar Malami in New York on Wednesday.
“The Federal Government has indeed taken cognisance of the fact that where there exists a dispute between a state and the Federal Government, it is the Supreme Court that should naturally have the jurisdiction to determine the dispute between the state and the federation.”
Controversies have continued to grow across the country after a Port Harcourt Federal High Court ruled last month that the Rivers State Government had the powers to collect VAT within its territory.
In response through its house of assembly, Rivers State has enacted the state VAT law and immediately expressed readiness to enforce the judgment beginning from this month.
Lagos State Government has followed suit by enacting and signing the state VAT bill into law.
The state joined Rivers as a co-defendant in an appeal filed by the Federal Inland Revenue Service (FIRS) against the Federal High Court judgement.
But an Abuja Court of Appeal has ruled that all parties in the matter should maintain status quo.
Rivers State Government has asked the Supreme Court to set aside the ruling of the Court of Appeal.
It also asked the apex court to order that the substantive appeal by the FIRS and all other processes be heard and determined by a new panel of the Court of Appeal.
Ogun State has also joined the race as the bill to legalise VAT collection passed the second reading in the state house of assembly.
The Southern Governors Forum (SGF) has expressed support that VAT should be collected by states to engender fiscal federalism.
Although some states, including, Kogi, Ebonyi and Katsina, have opposed the idea, many Nigerians believe that the current VAT face-off will set the nation on the path of fiscal federalism.