The need to avoid fiscal anarchy, By Akinyemi Ashade


The reactions from the states that stands to benefit from the current court ruling and the move by FIRS to amend the Constitution by including VAT in the exclusive list and making tax legislation an exclusive preserve of the Federal Government, without addressing the fundamental question of fiscal federalism is a call for fiscal anarchy.

Background

The Federal High Court, Port Harcourt Division, recently delivered a judgement in the case between the Attorney General for Rivers State and Federal Inland Revenue Service (‘FIRS”) & Attorney General of the Federation, stating that the Federal Government of Nigeria (FGN) lacks the power to impose and collect taxes that are not listed under Items 58 and 59 of Part I of the Second Schedule of the Constitution of the Federal Republic of Nigeria 1999 (as amended) (“the Constitution”)

We should recall that in October 2019, the Federal High Court, Lagos Division, in the Registered Trustees of Hotel Owners and Managers Association of Lagos v. A. G. Federation & Others, while considering the validity of the Hotel Occupancy and Restaurants Consumption Law of Lagos State, upheld the powers of the Lagos State…



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