The Ondo State Governor, Rotimi Akeredolu, has warned that the bid by some interests to amend the Value Added Tax (VAT) to favour the Federal Government against other tiers of government will fail.

This is coming a day after the Governor presided over a southern governors meeting in Enugu in which they reaffirmed their commitment to fiscal federalism and expressed their support for the position that state governments have been empowered to collect VAT.

In his reaction to the ongoing debate, Akeredolu believes that the issue of collection of VAT by state governments has been settled against the Federal Inland Revenue Service (FIRS) despite the court order directing parties in the dispute to maintain status quo pending the determination of the substantive suit before it.

This was made known by the Governor while appearing as a guest on a Channels Television programme, Politics Today, on Friday.

What the Ondo State Government is saying

Akeredolu said, “Our (the states’) position is that having looked at the law, it is there clearly for us to see that taxation, or what we call consumption taxes, falls within the purview of a state, and only a state can charge consumption taxes.

“And I believe that those who are against it know of it. If they don’t know, people will not be rushing to the National Assembly for an amendment that will not see the light of the day; it will be dead on arrival.”

“What we did yesterday was to go back to our position in the Asaba Declaration,” he said. “In Asaba, we made it very clear without mincing words that we are committed to the practice of true federalism; that is all we are saying, and fiscal federalism is part of true federalism.

“So, there is no need for us to run away from it. There are many more states that will join and there are some that will not join because at the end of the day, whatever we arrive at, they will be binding on all the states and what the southern governors have resolved is not new.”

What you should know

The Ondo State Government had earlier revealed that it will implement the law on VAT that has been passed by the state after it has concluded its own research.
Recall that on August 9, Justice Stephen Pam of the Federal High Court Port Harcourt ruled that the Rivers State Government is legally empowered to collect VAT and not the FIRS.
The FIRS later approached the Court of Appeal in Abuja with a civil motion seeking a stay of the execution of the judgement earlier granted by the court in Rivers pending the determination of the case.
The appellate court led by Justice Haruna Tsammani, directed all parties to maintain the status quo and refrain from taking action that would give effect to the judgement delivered by Justice Pam, pending the hearing and determination of the substantive suit
However, the Rivers State government filed an appeal at the Supreme Court to challenge the ruling of the Court of Appeal in the VAT dispute between the state and the FIRS, in which said that all parties should maintain status quo.
The state has asked the supreme court to set aside an order of the Court of Appeal which directed the state to maintain the status quo on the collection of VAT pending the determination of an appeal filed by the FIRS.