The lawmaker said, “In Lagos State, we have always clamoured for true federalism. This is consumption tax from the people of Lagos and it should be domiciled in Lagos and used for the people of Lagos. There are so many hassles that have to do with federalism that we are practising. “We generate over 55% of the VAT in Nigeria and we get a paltry sum of 10%. Is that fair for a population of over 24 million. We are happy that the Rivers State Government went to court and the court was very clear that VAT was supposed to be a state affair. We have no choice but to follow suit.”

Despite a stay of execution by the Appeal Court in Abuja last Friday, Setonji David, a member of the Lagos State House of Assembly, has stated that the state will proceed with the implementation of its recently enacted VAT Law.

Despite the Appeal Court’s order to “keep the status quo,” Lagos would implement the VAT law, according to a lawmaker.

The politician, who represents Badagry II Constituency in the House of Representatives, claimed this on Monday during an appearance on Channels Television’s “Sunrise Daily” breakfast show, which The PUNCH monitored.

VAT is a consumption tax that is paid when goods and services are purchased. It has a 7.5 percent interest rate.

Following the lead of Rivers State, which signed its VAT bill into law last month, Lagos State Governor Babajide Sanwo-Olu signed the State VAT Bill into law last Friday, a day after the Lagos State House of Assembly passed it.

On the same day, Lagos petitioned to be added as a respondent with Rivers State in the Federal Inland Revenue Service’s appeal against the Federal High Court of Port Harcourt’s ruling that Rivers should begin collecting VAT.

The Appeal Court had deferred the hearing on Lagos’ motion until September 16 and directed the parties to “keep status quo.”

‘Why did Lagos join Rivers in the VAT chase?’


On Monday, David indicated on a televised appearance that Lagos would keep enforcing the VAT law until the Appeal Court rules differently.

“In Lagos State, we have always clamoured for true federalism,” the lawmaker remarked. This is a consumption tax collected from Lagos residents, and it should be domiciled in Lagos and used to benefit Lagos residents. We are dealing with a slew of problems related to federalism.

“In Nigeria, we create nearly 55 percent of the VAT, yet we only receive a pittance of ten percent. Is that reasonable for a population of more than 24 million people? We applaud the Rivers State Government for taking the matter to court, where the judge said unequivocally that VAT was meant to be a state matter. We don’t have a choice except to follow.”

“The current quo is that we have enacted the law in Lagos and the law is in existence,” the legislator added, “and I think strongly that until another judgement is made by the Court of Appeal to the degree that what we have done is unlawful, the law subsists.”

“By our own understanding,” he said, “what exists in Lagos is our own law, unless that legislation is struck aside by the Court of Appeal.” As a result, the Lagos State Government would be in charge of collecting VAT in Lagos.”

David said, “Correct,” when asked if the state government will go ahead and enact its VAT law.

‘Lagos requires financial assistance for infrastructure development.’

Despite accounting for more than half of the country’s VAT, the lawmaker bemoaned the fact that the state has no special status. He stated, “Anywhere we can collect money to fund the state’s infrastructural development, we would not hesitate to do it.”

The lawmaker, on the other hand, claimed that with the adoption of the VAT law in Lagos, the law has protected the interests of small companies.

‘LIRS is well-equipped for VAT collection.’

“The Lagos Internal Revenue Service is well-positioned, performing admirably, and is well-equipped to collect VAT,” David said, adding that Lagos aided FIRS in developing its VAT collection by sending state workers to Abuja.

Despite the fact that the FIRS has gone to court, the member claims that there has been “no pushback from the FIRS yet” to the state administration.

Despite the fact that the FIRS has gone to court, the member claims that there has been “no pushback from the FIRS yet” to the state administration.

‘It is customary for Lagos VAT law to be enacted quickly.’

David commented on the VAT law’s quick passage and enactment in Lagos, saying that the bill went through the typical process but was passed and signed into law in less than a week.

“It depends on the urgency of the circumstance; we’ve passed bills like that before; it’s not unusual,” he said of the bill’s quick passage.

The PUNCH previously reported that human rights lawyer Mike Ozekhome (SAN) claimed that the Court of Appeal’s judgement in Abuja on Friday meant that the Rivers State Government has the authority to collect VAT until the court rules differently.

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