Tax deductions

Lawyers – FIRS General Warning on Threat of Recapture of Tax Deductions

In response to a public notice issued by the Federal Inland Revenue Service (FIRS) that it will claw back unremitted state and local tax deductions, the Federation’s 36-State Board of Attorneys General (BOAG) warned the Federal Government Agency to stop making threats to state governments.
The group, which issued the warning in a statement issued after its meeting in Lagos, condemned the public notice, saying they (the states) are equal and not subservient to the federal government.
BOAG said it would send a written response to FIRS, pointing out the agency’s flawed position, saying it had no authority to impose a sanction on states.
The statement was jointly signed by the Chairman and Secretary of BOAG, the Attorneys General and Commissioner for Justice of Lagos State, Moyosore Onigbanjo, and his counterpart from Nasarawa State, Dr. Abdulkarim Kana.
On the Federal Government’s attempt to deduct funds from the States to offset an alleged N418 billion advisory fee stemming from London/Paris Club loan repayments, the conference resolved to continue to resist, by all legal means. , to unwarranted deductions from their funds under any guise.
The body has advised the Federal Ministry of Justice, the Central Bank of Nigeria (CBN) and other relevant agencies to cease further action on the matter pending the final resolution of an appeal filed on behalf of the States.
With respect to the legal action regarding the right of states to collect Value Added Tax (VAT) and the judgment standing to that effect, the conference decided that given its absence from the 1999 Constitution, the VAT is a residual matter which falls within the exclusive legislative competence of each federated state.
Meanwhile, although the conference asserted that the judgment of the Rivers Division of the Federal High Court supported the constitutional position that VAT is a residual matter, it added that it was not opposed to a resolution politics of dispute to balance fiscal federalism with fairness.
According to the release, “With respect to FIRS’ threat to recoup unremitted tax deductions from state and local governments, the Conference emphasizes that state governments are equal to and not subordinate to the federal government.
“BOAG condemns the constant and destabilizing threats by federal government agencies to the federal states.
“To this end, BOAG will send a written response to FIRS, pointing out the agency’s misguided position and the fact that it does not have the power to impose a sanction on states.
“With regard to current developments in the administration of justice in the 36 States / Interstate Collaboration and the activities of the Lagos State Agency against Domestic and Sexual Violence, BOAG has encouraged the States to continue to share their experiences on critical issues and commonalities in the administration of justice.”
“BOAG has encouraged all states to use technology in legal proceedings. He also praised the collaboration between states to facilitate virtual hearings of police officers and witnesses outside the jurisdiction of the trial court.

“On the issue of stamp duties, BOAG has decided to send its position paper opposing the proposed amendments to the chairmen of the relevant Senate and House of Representatives committees in the National Assembly.

“BOAG will write to the President of the Senate and the Speaker of the House expressing its opposition to the proposed changes to the Stamp Duty Act. BOAG will publicly announce its opposition to the Federal Government’s proposed amendments to the Stamp Duty Act.

“BOAG will educate state governors on the adverse effects of the federal government’s proposed amendments to the Stamp Duty Act. The consultant should submit a position paper to the BOAG outlining the appropriate action to be taken in the matter”.

The conference also decided to send a delegation to the National Assembly to make representations on the proposed amendment during the public hearing of the amendment bill, adding that if the bill crystallizes into a law , the 36 state attorneys general would file a lawsuit to declare the text null and void.