VAT:  MAN, NECA others call for caution, urgent action

UFOMBA UZUEGBU

Organized Private Sector of Nigeria (OPSN) has expressed concern over the ongoing uncertainties generated by the Value Added Tax (VAT) Administration.

The group warned that the consequences of the controversy portend grave danger for the nation’s business community and by extension the fragile economic recovery the country had witnessed in recent time.

OPSN comprises Manufacturers Association of Nigeria (MAN), Nigeria Association of Chambers of Commerce Industry Mines and Agriculture (NACCIMA), Nigeria Employers Consultative Association(NECA), Nigeria Association of Small Scale Industries (NASSI) and Nigeria Association of Small and Medium Enterprises (NASME).

Briefing newsmen on Friday in Lagos the President of NECA Mr Taiwo Adeniyi who also doubles as Chairman of OPSN called for caution and urgent action towards resolving the conflict

The Federal Inland Revenue Service(FIRS) has been the Collecting Authority for VAT throughout the country by virtue of Value Added Tax (VAT) Act 1993.This was prior to the case of Attorney General of Rivers state vs Federal Inland Revenue Service and Attorney General of the Federation where the Federal High Court of Nigeria in Port Harcourt Division favoured the position of Rivers State Government and paved the way for the state to collect VAT.

Adeniyi said:” As the umbrella bodies representing the interests of Organized Businesses in Nigeria we are seriously concerned at the consequences of the on going controversy. While organized businesses have remained law abiding fulfilling their tax obligations to both the Federal and State Governments it would be an aberration to punish businesses or make them suffer from the proverbial “two elephants fighting”

“It is in our opinion that the conundrum be addressed timely as delay can fester negative effects on businesses most especially in collection and remittance of VAT”.

Continuing, Adeniyi said: “It is important to also note that at a time when businesses are clamouring for streamlining and reduction of tax burdens the ongoing challenge has the potential to make Businesses pay double VAT in view of the demands of the FIRS and State Governments for remittance of VAT.

“More so as the deadline for remittance of VAT collection falls due on 21st of every month. Businesses as the Collecting Agents are practically unclear on authority to remit to and without a clear path. This would rather aggravate the pain on businesses”.

The OPSN boss commended the Lagos and Rivers, State Governments for the platform created to engage Organized Businesses in the course of the controversy ‘Adeniyi appealed that the FIRS and the states should also engage in the interest enterprise competitiveness and national development.

“We appeal that while the issue remains in the Legal Quarters the Federal Inland Revenue Service (FIRS) and the States should not throw Organized Businesses under the bus”, he added.

Rivers State has since enacted a Value Added Tax Law which mandates all VAT paying entities within Rivers State to deduct, collect and remit VAT within the state to the Rivers State Government through the Rivers State Inland Revenue Service.

Similarly, Lagos State Government also enacted a VAT Law for the state and there are indications that other State Governments in country might also enact VAT Laws in their respective States.