Officials of the Rivers State Government and their Lagos State counterpart as well as Governors Nyesom Wike and Babajide Sanwo-Olu must be heaving sighs of relief.
A bill which could have set aside claims by the Rivers and Lagos State Governments to the collection of Value Added Tax, VAT have failed to scale through the process.
The “bill for an Act to Alter Part I of the Second Schedule to the Constitution of the Federal Republic of Nigeria, 1999 to include Value Added Tax on the Exclusive Legislative List”, was borne from the “feud” between the Federal Inland Revenue Service (FIRS) and the Rivers State Governor, Nyesom Wike, in 2021, over rights to collect Value Added Tax.
In Port Harcourt and Lagos, capitals of the respective states where the Governors picked fights with the federal authorities, there is indeed some relief.
A revision of the constitutional provisions regarding VAT could have spelt doom for states that are challenging the federal government’s dominance of VAT collection.
“We are celebrating the defeat of the carefully planned move which could have reduced our arguments in court to a mere academic exercise”, a top official of the Rivers State Government told the Telegraph.
He said, “We have once again survived injustice and the manipulative antics of the Federal Government.
“Representatives of the people sitting at the national Assembly have adhered to calls for the nation to encourage the devolution of powers.”
During the process of voting at plenary, the bill could not attract the required number of superior votes which could have altered the spirit of the constitution.
At the Senate, 41 senators voted in favour of the legislation which would denied states of any opportunity to participate in VAT related matters.
44 lawmakers who believed such a legislation will not be in the interest of the evolution of a true federalist system which most Nigerians are craving for voted against.
At the House of Representatives, 209 lawmakers voted against the move to put VAT matters on the exclusive list while 91 voted in favour of the proposed legislation.
Although a fierce legal battle is being fought, notably with Rivers and Lagos States, the Federal Government bent backwards through the Federal Inland Revenue Service to alter the constitutional provisions relating to VAT.
At least a total of 68 bills are part of crucial amendments that have been under consideration by the joint committee of the National Assembly on constitution review
With the rung pulled from under the feet of the Federal Government, the cases in court which have gone the way of the Rivers and Lagos State Governments would now run their full course.
Both states are hoping to emerge victorious in a matter that would redefine the relationship between them and the Federal Government.
Recall that the National Assembly on Tuesday passed five bills on devolution of powers.