Ruling on VAT, Step to Restructuring, Says Farotimi

Emma Okonji and Nosa Alekhuogie

A renowned lawyer, Dele Farotimi has said he is in full support of the court ruling in Rivers State, which categorically stated that state has the right to collect Value Added Tax (VAT), insisting that such court ruling is a step towards restructuring the country.

Just like Rivers State, Lagos State has also come up with a bill to collect tax in the state, instead of the usual Federal Government’s VAT collection through the Federal Inland Revenue Service (FIRS). The Lagos State bill on VAT has scaled through the first and second reading at the Lagos State House of Assembly.

In a related development, the former Chairman of Section on Public Interest and Development Law, Prof. Paul Ananaba, has said the ex-parte orders given by courts on the chairmanship position of the Peoples Democratic Party (PDP), are in order, according to law.

Ananaba quoted the Supreme Court, which stated clearly that the ex-parte orders were constitutional.

Both Farotimi and Ananaba spoke yesterday on the Morning Show of ARISE NEWS Channel, the broadcast arm of THISDAY Newspapers.

Farotimi who condemned the act of federal government collecting VAT, said the problem had always been that the Nigerian state had always been ruled with force and impunity.

According to Farotimi, “Lagos State was the first to develop that thermonuclear weapon, which is actually a product of a lie that could not be sustained. I recall that far back when our Honourable Vice President, His Excellency was still the Attorney General in Lagos State, it was easy for the state to realise the fact that VAT is a local tax and collections should be local, and there is nothing that enables the federal government to collect VAT. They know where the law lies even in that lawless constitution and whoever is going to take this case has to go by the constitution which is not ambiguous.”

Farotimi further said: “This thing will have far reaching effects between Lagos State and Rivers State. They must account for well over probably as much as 70 per cent. I’m not a tax expert, but I know that a sizable chunk comes from those two states, and it is not by accident in Lagos State. It is because Lagos State is a net beneficiary of the refugee problem that has been in Nigeria for over 20 years.”

He further explained that this should be an opportunity to sit down and discuss Nigeria.

“What has happened is that Governor Nysom Wike of Rivers Stare, who is an eminent member of the Nigerian ruling class and also, a beneficiary of the Nigerian ruling class, is the one who pressed the self-destruct button on that class. We should talk about what will happen to every section of the country, not just those who will lose the tap from where they have been taking money from the system. Where we are, whether we like it or not, it’s either President Muhammadu Buhari will enforce his own will, as a man and not the lie that pretends to be the constitution or he will obey the court, which is the basis of his own existence in office as the President. Is the President of the Federal Republic of Nigeria based on the 1999 constitution, which is a disguised decree 24 of 1999. So now he has a choice, he has to decide whether he wants to overthrow that constitution,” Farotimi said.

He, however, stressed the Federal Inland Revenue Service (FIRS) has no legal basis to ask for VAT .

“What you are hearing from FIRS is the ventriloquist voice when they are talking about body language. His body language does not count anymore in this. This is about a court declaration, and they have a choice to go to the Supreme Court, but let’s see what magic they can perform.” Farotimi added.

Speaking about the recent summon by the Chief Justice of Nigeria (CJN) on the conflicting ex-parte orders on the Chairmanship position of PDP, Ananaba said the Supreme Court had stated clearly that ex-parte orders were constitutional.

According to Ananaba, “Now, the discipline of judges will have to come from the National Judicial Council (NJC) and before the NJC, there has to be a petition. And while they may be waiting for this petition, the public will be saying that nothing has been done about these kind of unbecoming injunctions flying from different courts or different parts of the country. So I think it was a well thought out way by the CJN to call other judges to order. I understand he is making plans to invite the judges that actually gave those orders. When CJN took that step, it becomes difficult for NJC to wait for any former petition because the CJN is the head of the agency. But at the bar, the NBA has risen to it, and must not allow this to go.”

Ananaba further said: “Injunctions are good but the way they are abused contrary to the code of ethics of Judges, is the problem and we must tighten that. We must not allow this to just be wished away otherwise 2023 will be in jeopardy because politicians will be willing to use the court in the wrong manner and will proceed to do it if judges, the legal profession, the NJC and CJN will not step up to say it must not happen in the judiciary.”

He said the Section on Public Interest and Development Law, would be having a webinar next week, where it will address some of the issues as they relate to the different court ruling.