ICAN seeks amicable resolution of VAT collection dispute

The Institute of Chartered Accountants of Nigeria (ICAN), has implored Rivers and Federal Governments to amicably resolve the issue of VAT collection, to protect taxpayers and provide certainty to businesses.

Mr Ahmed Kumshe, the Registrar and Chief Executive of ICAN, gave the advice on Tuesday in reaction to the judgement of the Federal High Court in Suit No. FHC/PH/CS/149/2020.

The matter is between the Attorney General of Rivers, Federal Inland Revenue Service (FIRS) and Attorney General of the Federation.

The Federal High Court sitting in Port Harcourt had ruled in favour of Rivers in respect of the power to collect Value Added Tax (VAT), essentially giving power to states to collect VAT instead of FIRS.

Kumshe advised that the matter must not be allowed to degenerate given the country’s precarious tax revenue position and the general business environment.

He said that sustaining and replicating the position by other states would increase the cost and time required for compliance by businesses.

This, he said, was in addition to the complexity of administering VAT at the subnational level, such as treatment of international and inter-state transactions.

The ICAN registrar said that administering VAT at the state level might add to the myriad of taxes across different levels of government, many of which are targeted at the same tax base, thereby encouraging multiplicity of taxes.


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