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The Federal High Court of Nigeria, sitting at Port Harcourt division presided by His Lordship,  Hon. Justice Stephen Dalyop Pam delivered a 45- page judgment on the 9th August 2021 in an  action instituted by the Attorney General of Rivers State against the Federal Inland Revenue  Service and the Attorney General of the Federation as the 2nd defendant. In this case, the  presiding Judge ignored all the known principles of taxation and the previous judicial decision  which had earlier laid the constitutionality of the Value Added Tax Act to rest. His Lordship  indirectly amended the Constitution of the Federal Republic of Nigeria, 1999 as amended and  effectively put all the tax laws under the control of the plaintiff, the Rivers State.  

The plaintiff prays the Court to nullify the Value Added Tax Act, the Tertiary Education Tax  Act (erroneously referred to as education tax by the plaintiff) Personal Income Tax, Stamp  Duties Act as being unconstitutional null and void. Pages 1 to 33 of the Judgment dealt only  with the processes filed and exchanged by the parties and the preliminary objection raised by  both the 1st and 2nd defendants relating to joinder or misjoinder of parties and the issue of  jurisdiction of the court to entertain the application. The preliminary objections were rightly  resolved in favour of the plaintiff and therefore not necessary for this review.  

The judgement of the Court can be summarized in two sentences. (1) The power of the National  Assembly to make tax laws is limited to taxation of profit, income and capital gains only as  contained in item 7 (a) & (b) of Part II of the Second Schedule to the Constitution and (2) the  Federal Inland Revenue Service (Establishment) Act, Personal Income Tax Act, Value Added  Tax Act, Taxes and Levies ( Approved List for collection) Act among others are null and void being tax laws not specifically mentioned in items 58 and 59 of the Exclusive Legislative List 

(ELL) of the Constitution.

 

There are five (5) fundamental flaws in the judgment which are outlined as follows:  

(1) His Lordship erroneously limited the powers of the National Assembly to impose tax laws  to items 58 and 59 of the ELL. The powers of the National Assembly to make laws extends  beyond the items in the ELL. The ELL contains 68 items but only four (4) items were expressly  referred to as taxes. If this judgment is to be taken seriously, it, therefore, means that all other  tax laws (e.g companies income tax, tertiary education trust fund, withholding tax on  companies petroleum profit tax etc) which were not mentioned in Item 58 & 59 of the ELL are null and void. Again, His Lordship did not consider item 68 of the ELL which provides that ‘  Any matter incidental or supplementary to any matter mentioned elsewhere in this list.’ For  example, the Tertiary Education Trust Fund ( erroneously referred to as ‘education tax by the  plaintiff and His Lordship) is derived from 2% of the assessable profits of all companies  operating in Nigeria, except the profits of companies in the petroleum upstream sectors. The  question now is: If item 59 of ELL includes taxation of profit and 2% of profits of companies  is set aside as “education tax”, then why should such law be declared null and void on the  flimsiest reason that it was not expressly mentioned in the Constitution?  

(2) Another fundamental flaw in the case of the plaintiff which was not noticed by His Lordship  was that the plaintiff did not plead any state law similar to the Value Added Tax Act. May be,  if there were such laws, the issue of double taxation would have arisen. Even with such state  law, His Lordship decision would not have been justified. His Lordship ought to have  considered the case of AG Lagos State v. Eko Hotels Ltd & Anor ((2018) 36 TLRN 1 where the Supreme Court held that the Value Added Tax Act has covered the field and the  Sales Tax Law cannot be enforced as that will amount to double taxation. Although the Lagos  State later enacted the Hotel and Restaurant Consumption Law and smartly inserted a 5% tax  on the goods consumed in hotels and restaurants in Lagos State. Even with this law, the Federal  High Court in The Registered Trustees of Hotel Owners and Managers Association of  Lagos v. Attorney-General of Lagos State & Federal Inland Revenue Service ( Suit No:  FHC/L/CS/360/2018) did not declare the entire Value Added Tax Act null and void but only  exempted the goods consumed within the premises of hotels, restaurant and event centres in  Lagos State from the value-added tax on the ground that items consumed in hotels and  restaurants were not covered by VAT Act.  

(3) In this present case, His Lordship also did not consider the doctrine of covering the field.  Section 4(5) of the Constitution provides that If any Law enacted by the House of Assembly  of a State is inconsistent with any law validly made by the National Assembly, the law made  by the National Assembly shall prevail, and that other Law shall, to the extent of the  inconsistency, be void. His Lordship should have thrown out the case of the Plaintiff since  there was no such State Law in Rivers State in competition with the VAT Act, Capital Gains  Tax Act and Personal Income Tax Act  

(3) The judgment is also self-contradictory. In one breath, His Lordship agreed that the power  of the National Assembly to make tax laws is limited to taxation of profit, income and capital gains only as contained in items 58 & 59 of the ELL and items 7 (a) & (b) of Part II of the  Second Schedule to the Constitution. In another breadth, the court made a U-turn and granted  all the prayers of the plaintiff which among others includes a declaration that Education Tax and Technology levy (which are taxes from profits of corporate bodies registered under the  Corporate and Allied Matters Act, 2020, a federal law, unconstitutional, null and void.  

(4)Another fundamental flaw noticed in the judgment is the first prayer of the Plaintiff seeking  a declaration that the Plaintiff is entitled to be “bestowed" with the power to collect the capital  gains tax, income, or profits of persons in Rivers State. This relief ought to have been struck  out too. At this stage, His Lordship ought to have distinguished between the power to impose a tax and the power to collect tax. The present arrangement in our tax law is that the personal  income tax, capital gains tax, and stamp duties are federal laws imposed by the federal  government while the 36 states of the federation are bestowed with the power to collect the  taxes in respect of individuals in their respective jurisdictions and Rivers state is not an  exception to this arrangement. One then wonders the need for this relief as contained in the  judgment of the court.  

(5) Also the court did not consider section 25 of the Federal Inland Revenue Service  (Establishment ) Act 2007 which provides that the Service shall have the power to administer  all the enactment listed in the first schedule to the Act which includes the VAT Act, Capital  Gains Tax Act, and Personal Income Tax Act. 

Although, the division of taxing powers in the 1999 Constitution does not reflect the principle  of federalism. It is a design that is unfit for the growth of Nigeria. It is safe to conclude that  Nigeria is a unitary system in disguise as federal. However, this mischief cannot be cured by a  judicial decision but by an amendment of the Constitution.  

 

Kolawole Oyekan writes from the University of Warwick, United Kingdom. He can be reached  via email at kolawole.oyekan@warwick.ac.uk

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Controversial Islamic cleric, Sheikh Ahmad Gumi, has faulted Nigerian politicians for hiring private jets to attend the wedding of President Muhammed Buhari’s son, Yusuf Buhari on Friday, while hundreds of school children are languishing in bandits' dens.

Recall that, Yusuf Buhari married Zahra Bayero, the daughter of the Emir of Bichi, Nasiru Bayero, in a grand ceremony held in Bichi, Kano.

Sheikh Ahmad Gumi

The event was attended by Vice President Yemi Osinbajo, former President Goodluck Jonathan, former Vice President Atiku Abubakar, serving and former governors, traditional rulers, as well as prominent personalities from within and outside the country.

According to Daily Post, Sheikh Gumi during a preaching programme at Sultan Bello Mosque in Kaduna stated this, adding that Nigerian politicians hired private jets to attend the president’s son’s wedding, but forgot hundreds of innocent souls languishing in kidnappers’ den across the country.

He said, “Some people are in captivity in bushes dying silently as kidnappers are holding unto them until ransom is paid. Others are suffering from hunger, as it’s everywhere. People are facing all manner of problems, yet politicians spend public funds on private jets.”

Sheikh Ahmad Gumi then asked, “When Prophet Mohammed married off his daughter, who came from Mecca or Yemen? In the entire Medina; no righteous persons to oversee the solemnisation?

“Some politicians are spending money to hire jets to go to a wedding while criminals are holding people to ransom in the bush. The criminals (bandits) are milking the people.

“Some people have never earned N1million in their life, but bandits would demand N10 million. Many people have sold their houses, farms, everything and paid bandits for ransom, yet, some are not lucky to have their loved ones released unto them.”

The cleric decried how politicians corrupted the clergy, saying religious leaders have become subservient to politicians.

“Some religious leaders cannot survive without behaving in a servile manner towards politicians. Politicians have spoilt the clerics. Atrocities are committed in the country but no one can speak up.

“People think only those in the bush (bandits) milk us dry, no! Even our leaders milk us dry. Where did they get the money to hire all these jets?

“In one of the states, some pictures of a dilapidated hospital were sent to me. The roof was blown off and a patient was lying on the bed. That governor is in Kano to attend a wedding.

“How many schools were rehabilitated? The money that should be used to cater for the people is the one they hire private jets to junket around. Are you not also a bandit?

“We vent our anger against ourselves, other tribes. People are left killing themselves because of poor leadership,” Gumi added.

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A former Minister of Information and former presidential candidate of the Social Democratic Party, Prof Jerry Gana, has said that the Nigerian currency, Naira, under the Muhammadu Buhari administration, is one of the most useless currencies in the African continent.

Gana added that Nigeria also has the highest number of “miserable people in Africa.”

The SDP candidate stated these on Saturday at a retreat organised by the Kogi Peoples Democratic Party (PDP) Renaissance Group in Abuja.

Gana, also a PDP chieftain said most Nigerians, the majority of them youths, had become “jobless, frustrated and hopeless” as a result of the harsh economic policies of the current administration.

He said, “In the misery index, Nigeria is the highest in Africa. We are the most miserable set of people in Africa because nothing is moving. In fact, our currency is now 100 percent devalued. Nigeria is going through a very difficult time.

“The level of indebtedness in the past few years is such that every Nigerian is now in debt. The Naira is perhaps one of the most useless currencies in Africa today. I have never seen this level of corruption as we have today. In fact, the level of corruption makes the PDP governments look like angels because corruption is now a thousand times worse.”

Speaking on the insecurity in the country, Gana said nowhere was safe, adding that even Katsina, the home state of President Muhammadu Buhari, was bedevilled by banditry.

“Governor Maisari was advocating recently that everyone in Katsina state should get a gun. Do you know where Katsina is? Do you know who comes from Katsina?” he asked.

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A former Minister of Information and former presidential candidate of the Social Democratic Party, Prof Jerry Gana, has said that the Nigerian currency, Naira, under the Muhammadu Buhari administration, is one of the most useless currencies in the African continent.

Gana added that Nigeria also has the highest number of “miserable people in Africa.”

The SDP candidate stated these on Saturday at a retreat organised by the Kogi Peoples Democratic Party (PDP) Renaissance Group in Abuja.

Gana, also a PDP chieftain said most Nigerians, the majority of them youths, had become “jobless, frustrated and hopeless” as a result of the harsh economic policies of the current administration.

He said, “In the misery index, Nigeria is the highest in Africa. We are the most miserable set of people in Africa because nothing is moving. In fact, our currency is now 100 percent devalued. Nigeria is going through a very difficult time.

“The level of indebtedness in the past few years is such that every Nigerian is now in debt. The Naira is perhaps one of the most useless currencies in Africa today. I have never seen this level of corruption as we have today. In fact, the level of corruption makes the PDP governments look like angels because corruption is now a thousand times worse.”

Speaking on the insecurity in the country, Gana said nowhere was safe, adding that even Katsina, the home state of President Muhammadu Buhari, was bedevilled by banditry.

“Governor Maisari was advocating recently that everyone in Katsina state should get a gun. Do you know where Katsina is? Do you know who comes from Katsina?” he asked.

Money News AddThis :  Original Author :  SaharaReporters, New York Disable advertisements : 
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Detectives from the Ogun State Police Command have shot dead two bandits who are suspected to be kidnappers in the Onigaari area along the Lagos-Ibadan Expressway.

According to the police on Saturday, the bandits engaged the police in a gun duel at Bere forest in Onigaari area before they were killed.

The hoodlums were six sighted in the forest, and were planning a kidnap operation when they were engaged by the police operatives.

The Police Public Relations Officer, DSP Abimbola Oyeyemi, stated in a release obtained by SaharaReporters that the hoodlums on sighting the policemen, opened fire on them, and a gun battle ensued between them.

He said, “At the end of the encounter, one of the bandits was shot dead on the spot, while others escaped with varying degrees of gunshot injuries.

“Searching the forest further, one of the bandits with bullets wound was arrested in the bush but gave up the ghost a few minutes after.

“Two AK-47 rifles with breech numbers 1983NF1040 and 1987-3-CA-1212 with five rounds of ammunition were recovered from them. The latest rifle recovery makes it four AK-47 rifles recovered by the command within the period of two weeks. Also recovered from them are sachets of tramadol and assorted charms.

“Meanwhile, the Commissioner of Police, Edward Awolowo Ajogun, has ordered for a massive manhunt for the remaining members of the gang. He also appealed to members of the public, especially hospitals not to hesitate to inform the police if anyone with gunshot injuries is seen in their areas.”

Police News AddThis :  Original Author :  SaharaReporters, New York Disable advertisements : 
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Detectives from the Ogun State Police Command have shot dead two bandits who are suspected to be kidnappers in the Onigaari area along the Lagos-Ibadan Expressway.

According to the police on Saturday, the bandits engaged the police in a gun duel at Bere forest in Onigaari area before they were killed.

The hoodlums were six sighted in the forest, and were planning a kidnap operation when they were engaged by the police operatives.

The Police Public Relations Officer, DSP Abimbola Oyeyemi, stated in a release obtained by SaharaReporters that the hoodlums on sighting the policemen, opened fire on them, and a gun battle ensued between them.

He said, “At the end of the encounter, one of the bandits was shot dead on the spot, while others escaped with varying degrees of gunshot injuries.

“Searching the forest further, one of the bandits with bullets wound was arrested in the bush but gave up the ghost a few minutes after.

“Two AK-47 rifles with breech numbers 1983NF1040 and 1987-3-CA-1212 with five rounds of ammunition were recovered from them. The latest rifle recovery makes it four AK-47 rifles recovered by the command within the period of two weeks. Also recovered from them are sachets of tramadol and assorted charms.

“Meanwhile, the Commissioner of Police, Edward Awolowo Ajogun, has ordered for a massive manhunt for the remaining members of the gang. He also appealed to members of the public, especially hospitals not to hesitate to inform the police if anyone with gunshot injuries is seen in their areas.”

Police News AddThis :  Original Author :  SaharaReporters, New York Disable advertisements : 
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