The Federal Inland Revenue Service (FIRS) has said its opposition to the administration of Value Added Tax (VAT) by states in the country is because it has the potential to stifle businesses and investments.
It said the decision of the Federal High Court to grant powers to states to administer VAT would make it difficult for businesses to thrive.
To this end, the revenue agency, it was gathered, has written to the National Assembly for an amendment of the constitution to accommodate VAT in the Exclusive Legislative List of the 1999 Constitution.
The development follows rising agitation by some states to collect and utilise proceeds of consumption tax, after Rivers State secured victory in court on the matter and has announced the commencement of full implementation of its VAT law.
It was also gathered that Lagos and Ekiti State governments are set to file to be joined in the ongoing legal battle between the FIRS and Rivers State and to enact laws on VAT collection in their states, in a bid to start collecting VAT.
The FIRS maintained that the decision of the Federal High Court to grant powers to states to administer VAT could be counterproductive.
The Group Lead, Special Operations Group, FIRS, Mathew Gbonjubola, said there was nowhere in the world, where the administration of VAT was done at the sub-national level, adding that the service cannot afford to devolve such powers to states.
Gbonjuola, in a media briefing, said contrary to speculations, the FIRS administers the consumption tax on behalf of the three tiers of government and not for the federal government alone.
According to him, revenue from VAT was administered under an arrangement that allows the federal government to collect 15 per cent, states 50 per cent, and local government 35 per cent and that the existing arrangement allowed states and local governments to take about 85 per cent of VAT proceeds.
