VAT: Organised private sector seeks clarity on payment

The Organised Private Sector of Nigeria (OPSN) has called on the federal government to clarify the ongoing controversy surrounding the payment of value added tax.

The body, at a news conference addressed by its chairman, Taiwo Adeniyi, on Sunday in Lagos, said private businesses are in quandary as the deadline for VAT remittances elapses.

Specifically, OPSN is asking the federal government to make a pronouncement on the issue so that businesses can know what to do.

“We are aware that by September 21, we will be penalised if we do not pay or remit the VAT for the month of August.

“We are also aware that laws are not made in retrospect. It then means that even if those laws have been enacted, particularly the Lagos State law which came into effect in September, it will not affect the payment by businesses in the state.

“Due to our remittances, we have issues with the fact that the law for Rivers was made in August and majority of the businesses in Lagos usually will have a relationship with the Rivers State Inland Revenue too.

“The confusion in the public space is the reason we are calling on the government to come to our aid as we want to pay.

“It is for the government at the centre to make a pronouncement as to what becomes of us,’’ Mr Adebiyi explained.

The raging VAT controversy follows a ruling by the Abuja Division of the Court of Appeal which ordered parties to maintain status quo ante bellum on the moves by states to start collecting VAT.

Before then, the Federal Inland Revenue Service had been collecting VAT in all states of the federation by Rivers State challenged the practice at a Port Harcourt Division of the Federal High Court and won.

Justice Stephen Pam had ruled that the federal government lacked constitutional power to collect VAT. The FIRS then approached the appeal court to challenge the judgement.

Meanwhile, Mr Adeniyi, who is also the President, Nigeria Employers Consultative Association (NECA), said that the on-going challenge had the potential to make businesses pay double VAT in view of demands by the FIRS and state governments.

He said that businesses, as the collecting agents, were practically unclear on the authority to remit to and without a clear path, this would further aggravate the pain on businesses.

“It is a popular saying that where two elephants fight, it is the grass that suffers.

“It is no longer news that Nigerian businesses have been battling with myriads of challenges, making survival of enterprises and ease of doing business in the country among the worst in this part of the world,’’ he said.

VAT collection by the federal government began during the military which sought to enforce unitary system of government. The money is shared by the three tiers of government.

There are however complaints from some states that the regime is unconstitutional and unfair in a federal arrangement.

Following the court ruling, however, Lagos and Rivers states passed laws that allowed them to collect VAT.

OPSN comprises Manufacturers Association of Nigeria, the Nigeria Association of Chambers of Commerce, Industry, Mines and Agriculture, NECA, Nigeria Association of Small Scale Industries and the Nigeria Association of Small and Medium Enterprises. 

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