VAT Controversy Good For Fiscal Federalism, Says Femi Adesina

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    Special Adviser (Media and Publicity) to the President, Femi Adesina on Sunday said the ongoing tussle over the collection of Value Added Tax (VAT) between states and the Federal Government may eventually bring about fiscal federalism.

    Speaking on a television programme, Adesina also said that the Muhammadu Buhari-led Federal Government is ready to obey the final decision of the courts on the issue, which he, however, said, is likely going to reach the Supreme Court.

    It would be recalled that the Rivers and the Lagos State governments have enacted and signed laws to ensure their respective states control the collection and utilization of VAT revenue generated within their space.

    However, the Court of Appeal on Friday asked parties involved to maintain the status quo until the matter is determined.

    Adesina disclosed that President Muhammadu Buhari has no interest in interfering with the ongoing court processes and is only waiting for the final pronouncement.

    He said: “I think the VAT issue is good because there have been talks about restructuring and fiscal federalism in the country. If states eventually get their demands in respect of VAT, there will be something like fulfilling fiscal federalism. But then, fiscal federalism itself must be done within the ambits of the law.

    “That is why this issue may, and will likely, end up in the Supreme Court and when the Supreme Court pronounces, that is what the law says. If it’s in favour of the states, fine. If it’s in favour of the federal government, fine. You know that even all these states are not unanimous. You have heard some governors speaking out against the position of certain states who are so militant on this VAT issue.

    “So eventually, we will have a legal pronouncement, which may come from the highest court in the land and whatever that court says, then is the law in the country. Knowing the Buhari administration, it will obey the rule of law.”

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