FG, Wike Put Nigeria’s Federalism On Trial Over VAT Collection —Experts, Lawyers


NIGERIA’S federal structure appears on trial again, following the judgment of the Federal High Court sitting in Port Harcourt, granting the Rivers State government rights to collect Value Added Tax (VAT), most experts said on Wednesday. 

Rivers State Governor, Nyesom Wike, on Wednesday, met with corporate bodies in Rivers State on the need to comply with the judgment, after the court rejected the request of the Federal Inland Revenue Service (FIRS) for a stay of execution. 

The judgment, observers said, has further reinforced the agitation against appropriation of the functions and powers of states by the Federal Government, contrary to a coordinate relationship under federalism. Prominent groups, organisations and ethnic nationalities have led the campaign for devolution of powers from the centre to states, resource control or fiscal federalism, among others, to replace the existing lopsided structure foisted on the country. 

Legal practitioners and other experts, who spoke to the Nigerian Tribune, averred that the judgment remained the law and should be complied with by all parties, with some of the experts stating that it was another acid test for the country. 

In their view, the judgment resonated with the demand for restructuring of the country on the basis of the principle of federalism. 

A senior Advocate of Nigeria (SAN), John Baiyeshea, said there was no controversy over the step taken by Wike based on the declarative judgment of the high court. “The judgment of the Federal High Court on the subject remains valid until it is set aside by a higher court. There is no controversy about the position of the law on this. So, as it stands today, Rivers State has the right to collect VAT as ordered by the Federal High Court in Port Harcourt,” he said. 

Another eminent constitution lawyer, Dr Tunji Abayomi, backed Wike on his decision to implement the judgment of the high court. 

“Governor Wike is enforcing the favourable decision of a court of law which is also binding on the Federal Government. 

“I, of course, know that the Federal Government filed an appeal but an appeal without an order of stay does not impede the enforcement of a court decision. 

“Moreover, VAT is tax on consumption within states. It seems strange that the Federal Government will collect consumption tax in a federally-arranged political system,” he said. 

A prominent legal luminary, Chief Supo Shonibare, said the court had, by the declarative judgment, given its interpretation of the provisions of the 1999 Constitution on the matter. 

“Restructuring is about devolution of powers to other tiers of government. Judicial activism in interrogating our incurably defective military constitution through the courts is another necessary approach to achieving devolution of powers,” Shonibare stressed. 

“The issue of VAT collection was determined in a declaratory judgment by a court of competent jurisdiction. FIRS has appealed. The court has also refused to grant a stay as it’s a declaratory judgment. 

“The high court has discharged its own responsibilities in the interpretation of our constitution. In that event, the Rivers State government and Governor Wike are legally entitled to begin to collect VAT in the state. 

“One must also take judicial notice of the happenings in Lagos State. The legislature is proceeding to enact the law to enable the Lagos State Internal Revenue Services collect the same. Perfectly legal,” Chief Shonibare stated. 

“The heavens will not fall, as the federating units which were regions in the First Republic collected revenues and were able to remit the share of the revenue collected that the federal entity was entitled to share. So it’s not a novel approach. It was the military that scuttled that arrangement in fashioning a unitary system. We are a federation. 

“We need to have our present defective constitution set aside and have the federating units and the Nigerian people negotiate and agree on an acceptable autochthonous constitution for the polity,” he added. 

A lawyer in Ondo State, Mr Wale Obanigba, said the directive by Wike was premised on the judgment of the court, because, “In that considered judgment, the court agreed with the Attorney-General of Rivers State that the collection of VAT and PIT are within the jurisdiction of the Rivers State and not the FIRS. 

“Though the FIRS has appealed the judgment, its request for a stay of execution was equally rejected by the same court. Consequently, by that judgment, the directive of the Rivers State governor is in order. 

“By the provisions of Section 287(3), decisions of the courts, especially the Federal High Court, are to be enforced against all persons and authorities, including the FIRS, until such decision is set aside by the appellate court. 

“Importantly, the said judgment is a victory for the advocates of a restructured Nigeria where true federalism is the hallmark.” 

Chairman, Nigerian Bar Association (NBA), Plateau State chapter, Mr Yakubu Bawa, threw his weight behind Wike, saying the implementation of the court order on VAT would bring development to Rivers and make the Federal Government to be alive to its primary responsibility to the citizens. 

Bauchi-based legal practitioner, Shippi Rabo, described the judgment of the court as the law in motion, which, according to him, “cannot be stopped by an injunction. It can only be appealed against and upturned or affirmed by a higher court. 

“So long as a judgment is not appealed against and upturned by a higher court, the enforcement of such judgement is legal.” 

He, therefore, did not see anything wrong with Wike’s action because “it is what the court has declared which has not been reversed.” 

In his reaction, chairman, Bauchi State chapter of NBA, Mr Jibrin Jibrin, said, “There is nothing wrong with the step taken by the Rivers State government, more so, as the court has refused the application to stay the execution of the judgment. In addition, until there is an order by an appellate court to the contrary, this position will remain in force.”