AN APPRAISAL OF THE CONTROVERSY BETWEEN THE FEDERAL INLAND REVENUE SERVICE AND RIVER STATE GOVERNMENT IN RESPECT OF VALUE ADDED TAX COLLECTION

Abstract

Value added tax is the tax levied on goods and services by virtue of the additional value added from its original form to its final stage until it gets to the consumer. The taxing powers of the National Assembly are circumscribed by the powers created in that regard by the Constitution, the Constitution does not however expressly exhaust all the various kinds of taxes imposable by a State Government on persons or activities within its territory. Thus, the power to impose any tax that is not expressly enumerated in the Constitution is a residual power, which vests exclusively in the Governments of the various States of the federation. This paper contains primary and secondary sourced materials, such as laws, statutes and other resource materials. This paper revealed that though the matter is sub judice as it is presently been considered by the court, however, the Taxes and Levies (Approved List for Collection) Decree now an Act 1998 and the Value Added Tax Act, 2004 as amended in 2020 seems to have addressed this controversy. The Taxes and Levies (Approved List for Collection) Act 1998 specifically provides for items that the Federal Government can collect taxes and it includes the value added tax. The National Assembly seems to have the implied power under items 62 (trade and commerce clause) as sales tax is within the ambit of trade and commerce, also item 68 (incidental and supplementary power clause) of the exclusive list to collect VAT. Though VAT is on the residual list by virtue of the fact that it is neither expressly stated on the exclusive nor concurrent list, the VAT Act and the Taxes and Levies List for Collection Act are existing laws which subsist and the relevant provisions on the collection of VAT has not been set aside by any court of law.