By Jeph Ajobaju, Chief Copy Editor
Lagos lawmakers have done the second reading of the bills on Value Added Tax (VAT) and open grazing, both of which are hot issues at the moment, as the court has ruled that Abuja cannot collect VAT and Fulani cattle ranching is now deadly.
Assembly Speaker Mudashiru Obasa said the Prohibition of Open Cattle Grazing Bill would protect the ecosystem and ensure peace between farmers and herders, with plans to commence ranching services and register herders.
“Allocating a parcel of land is not enough but there should be a training of those who would go into ranching,” Obasa explained.
He disclosed that N500 billion VAT is generated in Lagos and N300 billion from other South West states but only a portion is sent back to the states.
“It is an opportunity for us to emphasise again on the need for the consideration of true federalism,” he said, adding that it is an opportunity for Lagos to meet funding challenges.
Southern Governors on open grazing
Per Nairametrics, the Southern Governors Forum (SGF) announced in July that the deadline for Open Grazing Ban was September 1 and stressed that funds deducted from the Federation Account for the Nigeria Police Security Trust Fund should be distributed to states to fight insecurity.
Court ruling on VAT
The Federal High Court in Port Harcourt ruled on August 10 that the Rivers State government should collect VAT and Personal Income Tax (PIT) in the state, not the Federal Inland Revenue Services (FIRS).
The lawsuit was filed by the state Attorney General against the FIRS and the federal Attorney General. The judgment applies in all states.
Justice Stephen Pam issued an order of perpetual injunction restraining the FIRS and the federal AG from collecting and intimidating residents of Rivers State to pay to VAT and PIT to the FIRS.
Among the reliefs sought by Rivers is a declaration that the constitutional powers of the federal government to impose taxes and duties are limited to items listed in items 58 and 59 of Part 1 of the second schedule of the Constitution.
The court granted all the 11 reliefs sought by the state government, ruling that
• There is no constitutional basis for the FIRS to collect VAT, Withholding Tax, Education Tax, and Technology Levy in Rivers or in any other state of the federation.
• The powers and competence of Abuja is limited to taxation of incomes, profits, and capital gains which do not include VAT or any other levy except those listed in items 58 and 59 of the Exclusive Legislative List of the Constitution.
The FIRS has appealed the judgment to the Federal Court of Appeal.
However, Rivers State Governor Nyesom Wike has since signed into law a bill on VAT collection in the state.
He also signed into law
· The Open Rearing and Grazing Prohibition Law No 5 of 2021.
· The Child’s Rights Amendment Law No 2 of 2021.
· The Residents Registration Agency Law No 6 of 2021.
· The Naming and Renaming of Infrastructure Law No 3 of 2021.