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Plan to amend constitution over VAT is dead on arrival -Akeredolu



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ONDO State Governor Rotimi Akeredolu said the attempt to amend the constitution to move value added tax (VAT) to the Exclusive List in favour of the Federal Government was dead on arrival.

He stated this during an interview on Arise News Channel on Sunday.

The governor noted that VAT was within the powers of state governments and the Southern Governors Forum which he chairs, noting that they had taken the position to pursue fiscal federalism.


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He said that even if the governors of each state agreed to the idea, the amendment would not scale through in various state houses of assemblies.

He said that the country was practising more of a unitary system than the statutory federalism.

“The issue of VAT, looking at the constitution, is under the purview of the states. Southern governors have taken a decision to pursue fiscal federalism. I am a lawyer. This is not a tax that is under the purview of the Federal Government.

“We, the southern governors, clamour for true federalism and true federalism includes fiscal federalism. There is no room for equivocation. Southern governors have taken a decision. They know that the constitution did not give them the power to collect VAT and that is why they are clamouring for the amendment of the constitution.

“That amendment will be dead on arrival. Even if the governors agree to amend the constitution, the houses of assembly in the various southern states will never approve it. The amendment must follow a laid down process.

“We are supposed to be a federation, but we have been operating unitary government, rather than the federal arrangement. That plan to amend the constitution over VAT will fail.”

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.

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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.

Last week, Lagos State 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.

Last Tuesday, Rivers State Government 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.

On Tuesday, Ogun State joined the race as the bill to legalise VAT collection passed the second reading in the state house of assembly.

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The Southern Governors Forum (SGF) has expressed support that VAT should be collected to engender fiscal federalism.

Many Nigerians have said that the current VAT face-off will set the nation on the path of fiscal federalism.

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