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HomeAfrica EconomyTax war rages on as federating states file suit...

Tax war rages on as federating states file suit at Supreme Court against Nigeria’s government on Stamp Tax collections, seek a refund of N176 billion; FIRS obtains stay of execution on VAT collection from Appeal Court sitting in Abuja

Attorneys-General of the 36 federating states of Nigeria have sued the Attorney-General of the Federation (AGF), Abubakar Malami, over alleged failure of the Federal Government to remit funds generated from stamp duties

Attorneys-General of the 36 states of Nigeria has sued the Attorney-General of the Federation (AGF), Abubakar Malami, over the alleged failure of the Federal Government to remit funds generated from stamp duties into states’ accounts.

The states are arguing that they are the sole authority to collect stamp duties and not the Federal Government. This is coming at a time when there is a conflict between some states and the Federal Inland Revenue Service (FIRS) over the collection of VAT.

The 36 states have gone before the Supreme Court to ask for, among others, an order compelling the Federal Government to account for funds collected by way of stamp duties on individual persons’ transactions in states from 2015 to date.

The states want the apex court to order the Government of the Nigerian Federation to refund N176,067,400,000, being “the ascertained and admitted collected stamp duties on individual persons’ transactions within the respective states for the period of 2015-2020” in addition to what would be ascertained later.

The states equally want the Supreme Court to restrain the Federal Government or its agents from appointing anyone to collect stamp duties on individual persons’ transactions within the respective states. These form part of the reliefs sought in a suit marked: SC/CV/690/2021 filed before the Supreme Court.

The states are of the view that by virtue of the mandatory provisions of Section 4(2) of the Stamp Duties Act, they (the states) are the sole authorities empowered to administer and collect stamp duties on all transactions involving individuals/persons within their respective states.

Stamp duty is the tax governments place on legal documents, usually in the transfer of assets or property. These stamp duties, also known as stamp taxes, are charged on documents that are needed to legally authenticate certain types of transactions.

The same 36 states had on June 16 this year, filed a separate suit before the Supreme Court, marked: SCN/CV/393/2021 in which they want the court to among others, compel the Federal Government to account for the about N2.28 trillion (both in cash and assets) so far recovered from looters since 2015.

They claimed, in the suit, which also has the AGF as the sole defendant, that between 2015 and now, the FG has recovered about N1.8 trillion in cash and about N450 billion worth of non-cash assets, but has allegedly diverted same into the Consolidated Revenue Accounts and other accounts not recognized by the Constitution, as against the Federation Account (FA) as required.

Meanwhile, the Appeal Court sitting in Abuja, the federal capital territory, has ordered all parties to maintain the status quo and refrain from taking action that would give effect to the judgment of a Federal High Court in Port Harcourt, which granted the Rivers State Government the powers to collect Value Added Tax (VAT generated from the Rivers State of Nigeria.

The three-man panel of the appellate court led by Justice Haruna Tsammani gave the Order on Friday while ruling on an appeal filed by the Federal Internal Revenue Service (FIRS).

FRS shifts forum for VAT dominion to the National Assembly proposes a constitutional amendment.


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