From Victir Osula, Abuja
Appeal Court, Abuja and Governor Babajide Sanwo-Olu of Lagos State
Few hours after Lagos State Governor Babajide Sanwo-Olu signed the Value Added Tax (VAT) Bill into law 46 hours after it was passed by the state house of assembly, the Appeal Court sitting in Abuja ordered a stay of execution and asked Lagos and Rivers State, which had signed the law during the week, to maintain status quo.
Lagos Commissioner for Information and Strategy Gbenga Omotosho said in a statement on Friday that the governor signed the bill for a law that would impose and charge VAT on certain goods and services in the state.
The law empowers the state to charge VAT at the rate of six per cent on the value of goods and services.
Omotosho said Lagos State Internal Revenue Service (LSIRS) had been empowered to administer and implement the law and account for money collected in accordance with the law.
According to the law, revenue accruing from VAT would be shared on a ratio of 75 per cent to 25 per cent between the state government and its local government council areas.
There have been controversies over VAT after a Port Harcourt Federal High Court, in its judgment last month, that the Rivers State Government had the powers to collect VAT within its territory.
The judgement, which was already being challenged at the Court of Appeal, has since pitched the FIRS against Rivers State Government, which vowed on Wednesday to enforce the judgement by beginning VAT collection this month.
Appeal Court sitting in Abuja on Friday however heard and granted the application filed by the FIRS seeking for the stay of execution of the trial court’s judgment even as Lagos State had signified its willingness to join the suit.