VAT saga: Malami backs finance minister, says political solution can’t be ruled out



The Attorney-General of the Federation, Abubakar Malami (SAN), has said that an out-of-court settlement and political solution cannot be ruled out to resolve the ongoing legal tussle between the Federal Inland Revenue Service and some state governments over the collection of Value Added Tax.


Malami stated this on Channels Television’s ‘Politics Today’ programme on Sunday which was monitored by our correspondent.


Malami’s comments came barely days after the Minister of Finance, Budget and National Planning, Mrs Zainab Ahmed, noted that efforts were ongoing on the issue but she did not give details as the matter was subjudice.


Ahmed, in an interview on Thursday night, had said though she was “not supposed to be talking about issues in court but I do hope that this problem can be solved by sitting on the table.”


“There are a lot of efforts going on right now. As I said, I don’t want to discuss it because it’s in court so I have to be careful. But there will be a positive political solution. We are working towards an out-of-court solution,” she had explained.


When asked on Sunday night whether there was any possibility for a political solution or an out-of-court settlement for the VAT battle between the FIRS and some state governments, the AGF replied, “Such consideration is not rightly on table but as I rightly stated, you cannot rule out any possibility.


“But as far as we are concerned in the Officer of the Attorney General, there exists judicial proceedings going on and within the context of that proceedings, we will address it squarely but if there is need for further engagement in line and in tune with the tradition of engagement, both judicial and otherwise, such possibility cannot be ruled out.


The Federal High Court sitting in Port Harcourt, the Rivers State capital, had on August 9 ruled that Rivers State and not the FIRS should be the authority collecting VAT and Personal Income Tax in the state.


The FIRS then approached the Court of Appeal in Abuja to challenge the judgement. It also wrote to the Senate to seek the inclusion of VAT collection in the exclusive legislative list.


Following the failure of the FIRS to obtain a stay of execution it sought from the appellate court to prevent the state government from enforcing the verdict, the Rivers State Government enacted a law to empower the state to collect VAT. The governor, Nyesom Wike, signed the bill into law on August 19.


Lagos State, whose request for joinder as a respondent in the suit before the Court of Appeal was also granted by the court, also enacted its own VAT law. The governor, Babajide Sanwo-Olu, signed the bill into law on September 10.


Meanwhile, after approving Lagos State’s request for joinder as a party at the Court of Appeal, ordered all parties to maintain the status quo on the matter, a ruling the Rivers State Government had approached the Supreme Court to set aside.


The Court of Appeal also directed that the matter be moved from Abuja to its Port Harcourt Division for further hearing. The court has yet to decide on the substantive suit as of the time of filing this report.

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