The Lagos State House of Assembly has begun moves to empower it to collect Value Added Tax, VAT.
The legislator entitled “Value Added Tax Bill” was read for the first and second time and committed to the committee on finance for deliberation.
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The move follows reports that Rivers and Lagos State have started collecting VAT generated in their states sequel to a judgment of a Federal High Court in Port Harcourt which declared the collections done by the Federal Government through the Federal Inland Revenue Service, FIRS, as unconstitutional.
The Rivers State government had signed into law a bill empowering it to collect VAT, shortly after the judgment.
In Lagos, the Speaker of the state House of Assembly, Mudashiru Obasa, said the bill will ensure a boost in revenue and attendant improvement in infrastructural development in the state.
According to him, the move which is in line with the demand for fiscal federalism will ensure that Lagos State which generates about 500 billion from VAT gets its due share instead of the small fraction it receives when the money is pooled together with other states and redistributed.
He called on the Lagos State government to align its legal resources to ensure the Port Harcourt judgment is upheld at the Supreme Court.