Nigeria: VAT, other taxes outside jurisdiction of federal government (Federal High Court)
Federal government of Nigeria lacks the power to impose and collect taxes that are not listed under Items 58 and 59 of Part I of the constitution
Federal government of Nigeria lacks the power to impose and collect certain taxes
The Federal High Court Port Harcourt Division issued a decision stating that the federal government of Nigeria lacks the power to impose and collect taxes that are not listed under Items 58 and 59 of Part I of the constitution.
The case is: Attorney General for Rivers State vs. Federal Inland Revenue Service & Attorney General of the Federation
Consequently, taxes such as value added tax (VAT), withholding tax, tertiary education tax, and the national information technology development agency levy (among others) that are not specifically listed under Items 58 and 59 are outside of the jurisdiction of the federal government of Nigeria.
The court also noted that the provisions of Item 7(a) and (b) of Part II of the Second Schedule of the Constitution do not extend the legislative competence of the National Assembly beyond capital gains, incomes or profits of persons other than companies, and documents or transactions by way of stamp duties. Therefore, the National Assembly lacks the power to enact any law to impose any form of sales tax, including VAT, and any other tax outside of those specifically mentioned in Item 7(a) and (b) of Part II of the constitution.
Finally, the Court noted that the Taxes and Levies (Approved List of Collection) Act is unconstitutional, hence, any tax or levy provided for in the law is also unconstitutional, null and void, except such tax or levy is provided for in the constitution or any other law made validly by a competent legislature.
Read an August 2021 report [PDF 427 KB] prepared by the KPMG member firm in Nigeria
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