Ubani, Idris Spar Over Secret Implementation of 7.5% VAT
By Georges Macnobleson-Idowu
Human Rights Lawyer, Monday Ubani, has urged contractors forced by the Accountant-General of the Federation, Ahmed Idris, to pay 7.5 per cent VAT of their contract sum, to drag him to court for secretly implementing the law.
The AGF had announced on Wednesday, that his office has begun implementation of the Finance Act, contrary to the Finance Minister, Mrs Zanaib Ahmed’s directive that implementation of the 7.5 per cent VAT will start on February 1, 2020.
Mr Idris had insisted that all government transactions now attract 7.5 per cent Value Added Tax (VAT), as stipulated by the new Act, as against the former 5 per cent VAT.
The Accountant General said: "Already the bill has become a law, and it was important for his office to obey the law. Once it has been approved and launched, ours is to implement.
"I had to stop the payment of a certain amount on Tuesday, because the transaction was processed based on five per cent VAT. Although the transaction originated last year before the new Act become operational, but it was concluded this year and the new law applies."
Reacting to the single-handed implementation, Ubani faulted the actions of the Accountant General, saying it's wrong for him to apply the newly signed 7.5 per cent VAT, to a transaction that was concluded last year.
The former 2nd Vice President of the Nigerian Bar Association said it's even worse when it's obvious that the Finance Act has not been gazetted, and modalities for its implementation have not been agreed upon for ministries, agencies, and parastatals to effect.
"Any VAT that must be 7.5 per cent must be after that particular VAT has been gazetted, as originally advised by the Finance Minister.
"It would be absolutely wrong to stop the payment of a contract sum that was actually based on 5 per cent VAT, because you believe the new VAT of 7.5 per cent should be applicable to the transaction."
The human rights lawyer also advised the contractor, whose contract payment attracted the 7.5 per cent VAT, to approach the law court for the interpretation of the transaction, in order to be able to get a refund of what was deducted from the initially agreed contract or transaction sum.
"I think the person being charged extra would have the right to go to Court base on the initial agreement of 5 per cent VAT on the transaction."
On his part, Lagos Lawyer, Dotun Hassan, who is also the President, Yoruba Council of Youth Worldwide, insisted that the Accountant General, is at liberty to implement the Act, as long as it has been signed into law by the President.
He said every law becomes effective immediately it's assented to by the appropriate authority, explaining that, that was why the date such laws were signed are always stipulated in the document.
"The Accountant General is right in using the 7.5 per cent VAT rate, because that's the law in operation. The fact that they didn't complete the contract the previous year and a new law has taken effect, shows there's a need to effect the new law."
Mr. Hassan, however, admitted that the contractor also has the right to ask for a review of such transaction sum since the initial sum was based on the 5 per cent VAT and particularly, realities of the previous year.
"As a matter of concern, what ought to be is that there must have been a review of the general transaction vis-a-vis the contract sum that was quoted before. You cannot use the old bargaining for the 7.5 per cent VAT."
"The contractor, on his own part, needs to seek a review of the contract sum, should the 7.5 per cent VAT be implemented."