Falana: What FG should do before implementing increase in VAT rate

Falana: What FG should do before implementing increase in VAT rate

Saturday, September 21, 2019 1:20 pm


Femi Falana

Human Rights Lawyer, Femi Falana, has called on the Federal Government to propose a Money Bill to the National Assembly before the implementation of the increase in Value Added Tax (VAT).

Falana told the News Agency of Nigeria(NAN) in Abuja, said that the National Assembly (NASS) erred by inviting the Minister of Finance and the Executive Chairman of Federal Inland Revenue Service (FIRS) to clarify issues of VAT increment.

According to him, provisions of the constitution states that the the President ought to have presented a money bill to be passed by the NASS before the increment.

“It’s illegal, under a democratic dispensation you cannot impose tax or increase tax without a law made by the National Assembly or the State Assembly as the case may be.

“In this case, it has to be realised that we are not under a military dictatorship.

“By virtue of section 59 of the Nigerian Constitution, any increase, levy or tax will have to be presented to the National Assembly by way of money Bill by the President, it has to be passed into law.

“The Senate erred in law by inviting them to come and clarify, the National Assembly has invited the Minister of Finance and the Federal Inland Revenue Services to come and clarify.

“No, the National Assembly must insist on its powers under Section 59 to pass a law to increase VAT or any tax, there can be no taxation without a legislation.

“The Federal Executive Council has no power under the Constitution to increase VAT or any tax in the country,” Falana said.

The Federal Executive Council had last Wednesday approved the increment of VAT from 5 per cent to 7.5 per cent.

The Minister of Finance, Budget and National Planning, Mrs Zainab Ahmed, had explained that the increase would only begin after the VAT Act was amended by the National Assembly and after consultations with the state and local government areas as well as the Nigerian populace.

According to her, our projection is to finish consultations early enough so that it takes effect in 2020.

She further disclosed that the FEC approved the Medium Term Expenditure Framework and Fiscal Strategic Paper, MTEF/FSP for 2020 to 2022, which will guide the 2020 Budget.

The Minister also said the next step was to present the document to the National Assembly for consideration.

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