VAT Saga: I disagree with AGF, VAT is not under the Exclusive Legislative List – Adewole

Barrister Mahmood Abdulbasit Adewole is an Ilorin based legal practitioner, an alumnus of Usmanu Danfodiyo University, Sokoto, where he graduated from in 2017. He thereafter proceeded to Nigerian Law School, Yenagoa Campus in 2018 and was called to the Nigerian Bar in 2019.

He had his pupilage at Hashim Abioye & Co (Trust Chambers) Osogbo, Osun State between 2019-2020. He is currently working as an associate with Ismaila Raheem & Co (Opeyemi Chambers) in Ilorin.

In this interview with JIMOH SULYMAN, the young Barrister shared his thoughts on the VAT saga among other sundry issues. Excerpt.

Is the AGF right to say that the Value Added Tax (VAT) is on the Exclusive Legislative List?

With due respect to the learned silk, I do not agree with him on this position. VAT is not expressly mentioned under the Exclusive Legislative List of the 1999 Constitution of the Federal Republic of Nigeria (as amended). Be that as it may, the Court is the appropriate authority empowered by section 6 of the Nigerian Constitution (aforementioned) to decide whether it is the federal government or the state government that is legally empowered to collect VAT. The decision of the Federal High Court, Rivers Division still subsists on this, until it is upturned by Court of Appeal Decision.

Don’t you think the power granted to the FIRS to access taxpayer’s books, documents, servers, billing systems, bank accounts, including those stored in a computer is against the Cybercrimes (Prohibition, Prevention, etc.) Act, 2015 (the “Cybercrimes Act”)?

To start with, Nigerian data protection and cyber-security regime forbids unauthorised access by any person or organization into the whole or part of the computer system or network of another person or an organisation.

However, by virtue of Order 57 Rule 3 of the Federal High Court (Civil Procedure) Rules, 2019, the Chief Judge of the Federal High Court of Nigeria is empowered to make practice directions for the Federal High Court; on matters arising from tax administration/enforcement as well as matters affecting the Federal Inland Revenue Service (“FIRS”).

Flowing from the above, Order III (2)c of the Federal High Court Practice Directions expressly grants the FIRS powers, pursuant to an ex-parte order, to access taxpayer’s books, documents, servers, billing systems, bank accounts. This also tallies with the provision of Section 51 of the Finance Act 2020. With these provisions, one can conclude that FIRS role in this regard is not unlawful.

In the same vein, the provisions of the Nigeria Data Protection Regulation 2019, issued by the National Information Technology Development Agency (“NITDA”), data processing carried out without the requisite consent of a data subject will nonetheless be regarded as “Lawful Processing”; where the processing is necessary for compliance with a legal obligation to which the data controller is subject, or it is necessary for the performance of a task carried out in the public interest or in exercise of official public mandate vested in the data controller (FIRS in this regard).

Despite the above, the privacy of citizens, their homes, correspondence, telephone conversations and telegraphic communications are constitutionally guaranteed in Nigeria. Thus, I humbly submit that the FIRS, in the exercise of its powers pursuant to the Practice Directions above, should endeavour that sensitive personal data of taxpayers are not compromised or abuse by the public.

Having the Rivers State Government getting a ruling at the Federal High Court, Port Harcourt Division that the FIRS is not empowered to collect VAT and the Federal High Court at the Court of Appeal, Abuja Division ordering the Rivers and Lagos State governments to maintain the status quo, is that not a legal confusion?

The decision of any Nigerian court subsists and remain binding until upturned by a superior court; this is based on the principle of judicial precedent.

Flowing from the above, the decision of the Court of Appeal is the latest and overriding on the earlier judgments of the lower court (i.e. Federal High Court, Rivers State). The Court of Appeal said that parties should “maintain status quo ante bellum”. In legal parlance, this means that the parties should go back to the situation they were before the suit was instituted.

In the instant case, this simply means that States government should continue to collect and remit VAT to the federal government (as they used to do before approaching court) until the matter is finally determined by the court (Supreme Court in this case).