The ongoing legal battle for the control of tax matters between the states and federal government has spread to the National Assembly. The Federal Inland Revenue Service, FIRS, apparently unwilling to let go, is making a desperate attempt to woo federal lawmakers on its side.
It would be recalled that a Federal High Court in Port Harcourt had recently barred the Apex tax agency from collecting Value Added Tax, VAT and Personal Income Tax in Rivers State.
The August 10 ruling obviously miffed FIRS and it promptly filed an appeal against it. The agency however could not obtain a stay of execution of the verdict.
As the fireworks continue in the courts, with some of the states notably Rivers and Lagos already counting their chicken, the FIRS has transmitted a memo to the National Assembly asking it to include VAT in the Exclusive Legislative List, a move that will effectively tackle interference from the states.
FIRS in its memo also asked for the establishment of a specialized Federal Revenue Court, which will take adjudication on tax matters away from Federal High Courts.
A July 1, 2021 letter from Muhammed Nami, Executive Chairman of FIRS and addressed to Idris Wasse, Deputy Speaker of the House of Representatives and Chairman Constitutional Review Committee, leaked to media on Wednesday.
The letter with references number FIRS/EC/CWREP/0416/21/037 which was received in Wase’s office on July 2, was titled, “Request for sponsorship of a bill for the establishment of the proposed Federal Revenue Court of Nigeria and the insertion of Value Added Tax under item 58 of the exclusive legislative list”.
The federal tax agency appealed to the legislators to vest, exclusively, all adjudication of tax disputes, VAT, taxes, levies and other laws, regulations, proclamations, government notices and rules on it.
Part of the letter reads, “The Federal Inland Revenue Service further proposes for the amendment of Section 251 (1) (b) of the Constitution of the FRN 1999 (amended) by removing the exclusive jurisdiction of the Federal High Court only on anything connected or related to federal tax matters since same would be vested on the proposed federal revenue court.
“The Federal Inland Revenue Service also proposes for the insertion of value added tax immediately after Stamp Duties under item 58 part II of 2nd schedule of the 1999 Constitution of the FRN.
“The Federal Inland Revenue Service appreciates the maximum cooperation and support we are receiving from your good office on tax matters generally.
“This has boosted our morale and determination to do more for the government in tax revenue generation.
“The FIRS therefore wishes to further request that the House of Representatives consider the request for the establishment of the Federal Revenue Court.”
The FIRS in the letter, noted that Item 59 of the Exclusive Legislative List Part 1, 2nd Schedule to the Constitution of the FRN 1999 as amended vests the powers to make laws on anything related to tax matters in Nigeria, on the National Assembly.
It added, “Historically, the Federal Revenue Court was established by the promulgation of the Federal Revenue Court Decree No.13 1973.
“However, the enactment of Section 228(1) and 230(1) of the 1979 Constitution of FRN, renamed the Revenue Court to Federal High Court.
“This was further replicated by the Federal High Court Decree (amendment) 1991Cap (60l LFN, now referred to as the Federal High Court (amendment) Act 2005 Cap F12 LFN revised edition 2010
”This amended Section 7 of the Federal High Court Act (1991), conferred exclusive jurisdiction on the Federal High Court in relation to tax matters amongst others.
“Section 228(1) and 230(1) was further re-enacted as Section 251(1) (a) to (s), of the Constitution of FRN 1999.
“The FIRS hereby proposes for the insertion of Section 254(G) to 254 (L) in the 1999 Constitution of the FRN to provide for the establishment of Federal Revenue Court, the appointment of Chief Judge, power to make rules for the proceedings, the appointment of judges of FRC and the exclusive jurisdiction of FRC on federal tax matters.”