The Presidency has broken its silence on the controversial issue over the Value Added Tax (VAT), saying President Muhammadu Buhari will respect the final verdict by the Supreme Court on the issue.
The Presidential spokesman, Femi Adesina while speaking on Arise TV said the matter will affect the ongoing conversation on fiscal federalism.
“Eventually, we will have a legal pronouncement, which may come from the highest court in the land. Knowing the Buhari administration, it will obey the rule of law.
“All these states are not unanimous. You have heard some governors speaking out against the position of certain states which are so militant on this VAT issue.
“The VAT 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,” he said.
The issue over who collects VAT between the Federal Government and the state governments started after last month’s ruling by a Federal High Court in Port Harcourt that said Rivers State is legally entitled to collect VAT in its state.
The Rivers State Government, therefore, enacted a VAT law and commenced the process to start the collection but the Federal Inland Revenue Service (FIRS) insisted on continuing with tax collection.
It has challenged the judgment at the Court of Appeal, which on Friday ordered the maintenance of the status quo until the determination of the appeal.
Lagos State has also enacted its own law to collect VAT.