By Eyo Nsima
The governor of Lagos state, Babajide Sanwo-Olu, has signed the State Value Added Tax, VAT, bill into law.
The State commissioner for information and strategy, Gbenga Omotosho, who confirmed the development, said, “bill for a law to impose and charge VAT on certain goods and services” after returning from an official trip to Abuja on Friday.
He added: “By this act, the bill has now become a law.”
The VAT bill had earlier passed the first and second reading at the Lagos State House of Assembly.
Speaker of the House of Assembly, Mudashiru Obasa, had said it would lead to increased revenue in the State.
The development would likely bring the Lagos State into having confrontation with the Federal Inland Revenue services, FIRS, which is opposed to States collecting the VAT.
Already, the FIRS has urged taxpayers not to panic over the recent court ruling by the Federal High Court sitting in Port Harcourt which dismissed its motion for stay of execution of the judgment that Rivers State can collect VAT from its resident, stating that “until the Court of Appeal, or even the Supreme Court, determines the matter, taxpayers are required to continue to comply with their Value Added Tax (VAT) obligations within the status quo framework.”
The FIRS had disclosed this in a statement by the Special Assistant to the Chairman of the FIRS on Media and Communications, Johannes Wojuola.
Specifically, it had stated: “The FIRS having lodged, in the Court of Appeal, both an appeal against the decision of the Federal High Court sitting in Rivers State in Suit No. FHC/PH/CS/149/2020, Attorney General of Rivers State Vs Federal Inland Revenue Service, and an injunction pending appeal of the said judgement, assures taxpayers that there was no cause for alarm.
“The Federal High Court ruling should not breed any confusion as to the obligations of taxpayers. Taxpayers must continue to comply with the Value Added Tax Act pending the final determination of the appeal.
“Taxpayers must continue to honor their tax obligations under the VAT Act. Failure to do this would put them on a collision course with the law.’
