National Assembly begins debating bill that will turn VAT into a local tax collected by states

MEMBERS of Nigeria's House of Representatives have begun debating a bill that will transfer the collection of value added tax (VAT) from the federal government to the 36 states of the federation.

Up until now, VAT has been paid into the federal coffers but in August, a high court issued an order restraining Nigeria's Federal Inland Revenue Service (Firs) from collecting Vat and personal income tax in Rivers State. In its judgement, the court directed the Rivers State government to take charge of the collection of both taxes.

Following the court’s judgement, Governor Nyesom Wike of Rivers State signed the VAT Law No. 4 of 2021 on August 19 into effect. Following suit, Governor Babajide Sanwoolu of Lagos State also signed a VAT law into effect after it was passed by the Lagos State House of Assembly.

With the momentum now building for the localising of VAT, lawmakers in the National Assembly have begun debating a bill that will make the measure federal. Sponsored by Hon Hassan Usman Sokodabo and Hon John Dyegh, the bill seeks to move VAT to the concurrent list from the exclusive list.