FIRS Proposes Federal Revenue Court, Wants VAT Moved to Exclusive Legislative List

FIRS, Federal Revenue Court, VAT, Exclusive Legislative List

FIRS Proposes Federal Revenue Court, Wants VAT Moved to Exclusive Legislative List

The Federal Inland Revenue Services (FIRS) had written a letter, dated July 1, to the National Assembly for the sponsorship of a bill to amend the 1999 Constitution and place Value Added Tax (VAT) administration on the Exclusive Legislative List, as well as establish a Federal Revenue Court (FRC) to sit over tax-related disputes.

The letter was written by its Executive Chairman, Mr. Muhammad Nami, to Deputy Speaker, House of Representatives, Hon. Idris Wase, who also doubles as Chairman, Special Committee on Review of the Constitution.

The letter, written while the FIRS was still contesting a suit filed on the collection by Rivers State, 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 68 of the Exclusive Legislative List.”

Nami had highlighted the increasing pushback by states to collect and retain the VAT proceeds in their respective states.

Specifically, the FIRS proposed the insertion of VAT immediately after Stamp Duties item 58 Part II, 2nd schedule of the 1999 Constitution, as amended. It expressed concerns that the number of tax cases was increasing annually at both the Federal High Court and the Tax Appeal Tribunal.

As a result, Nami said there was an urgent need to establish FRC to speed up the resolution of the tax disputes.

In the letter, the FIRS was proposing an amendment of Section 251 (1)(1b) of the 1999 Constitution, as 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 FRC.

He said the exclusive jurisdiction of the proposed FRC shall include adjudication of tax disputes arising or connected to the federal tax laws, including Company Income Tax Act (CITA), Petroleum Profit Tax Act (PPTA), Personal Income Tax Act (PITA), Capital Gains Tax Act (CGTA), STAMP Duty Act (SDA), Value Added Tax Act (VATA) and Taxed and Levies (Approved list for collection) Act as well as other laws, regulations, proclamation, government notices or rules related to these Acts.

In addition, the FIRS proposed for the insertion of Section 254G to 254L in the 1999 Constitution to provide for the establishment of the FRC, the appointment of Chief Judge for the proposed court, power to make rules for the proceedings of the FRC and the appointment of judges of the court as well as craving for the exclusive jurisdiction of FRC on federal tax matters.

He said the proposed court would among other things provide both the tax authority and taxpayers a platform for quick resolution of tax disputes and invariably increase tax revenue generation for the federal government.

Nami also said though the judges of the Federal High Court that presently handled tax matters were well grounded in the general practice of laws in the country, there was need for tax matters to be handled by individuals with cognate experience in taxation and tax practices for effective adjudication of tax disputes in Nigeria.

According to him, “Tax disputes are one of the fundamental factors that impede tax revenue generation in Nigeria, hence the need to establish a globally accepted practice of mechanisms for tax dispute resolution in Nigeria.”

He pointed out, “The number of tax dispute cases are increasing yearly at both the Federal High Court and the Tax Appeal Tribunal. There is, therefore, an urgent need for the establishment of the Federal Revenue Court to speed up the resolution of these tax disputes.”

He argued that the success stories of the tax appeal tribunals could be replicated better and more effectively if the FRC was established.

Nami stated that there were currently over 156 disputed tax liability cases across the six geopolitical zones, valued at over N379.43 billion, including $3.38 billion and €800,500.00.


Share your thoughts on the story with Nigerian Sketch in the comments section below.


Please enter your comment!
Please enter your name here