The federal government is considering an out-of-court settlement with states over the impasse on the collection of Value Added Tax (VAT).
The Minister of Finance and National Planning, Zainab Ahmed, disclosed this on Thursday while appearing on “Politics Today,” a political programme on Channels Television.
Mrs Ahmed said the ongoing litigation cannot resolve the disagreement, hence the need for a political solution between the centre and the sub-nationals.
The Federal High Court in Port Harcourt, Rivers State, had in a recent landmark judgment, held that it was unconstitutional for the Federal Inland Revenue Service (FIRS) to collect VAT and personal income tax in Rivers State.
In the wake of the judgement, Rivers and Lagos States have both signed separate laws that empower them to collect VAT.
On 10 September, a three-member panel of the Court of Appeal headed by Haruna Tsammani, issued orders that all parties should maintain status quo.
Rivers State government is currently challenging the ruling of the Court of Appeal at the Supreme Court
Also, governors of the southern states under the aegis of Southern Governors Forum (SGF) at a meeting in Enugu, expressed support for the collection of VAT by state governments.
Furthermore, the Federal Inland Revenue Services (FIRS) is reportedly seeking a constitutional amendment that will list VAT in the exclusive legislative list.
Ms Ahmed said the court will not bring a solution, rather, parties sitting at the table will solve issue.
“I have to do this carefully because they are issues in court, and | am not supposed to be talking about issues in court,” the minister said.
“But I do hope that this problem can be solved by sitting on the table, not on the pages of newspapers, not disagreements in court because it is possible to solve it on the table.
“Yes, there will be a positive political solution. We are working towards an out-of-court solution.”
Despite the raging controversy and litigation, the federal government is targeting N2.2trillion from VAT to fund the 2022 budget.
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