Tax Expert Urges Supreme Court to Deliver Judgment on Rivers State–FIRS VAT Dispute After Five-Year Delay
A tax practitioner and Fellow of the Chartered Institute of Taxation of Nigeria, Dr Francis Ubani, has called on the Supreme Court to urgently deliver judgment in the long-running legal dispute between Rivers State and the Federal Inland Revenue Service, now the Nigeria Revenue Service, over the constitutional authority to collect Value Added Tax.
Ubani made the appeal in a statement issued on Monday, arguing that the five-year delay in resolving the dispute had created uncertainty for governments, businesses and taxpayers across the country.
The tax expert urged the apex court to provide a definitive interpretation of the constitutional issues raised in the case and bring clarity to Nigeria’s fiscal federalism framework.
“With humility and utmost respect for the independent judicial institution in Nigeria, I appeal to the Supreme Court to interpret the true position of the Constitution and give an urgent and swift judgment on the litigation between the Rivers State Government and the Federal Inland Revenue Service over Value Added Tax,” he said.
According to him, the matter had remained unresolved since the Court of Appeal granted a stay of execution in 2021 following a Federal High Court judgment that reportedly favoured Rivers State.
“The verdict will break the silence in the matter, on which a stay of execution was placed five years ago, in 2021,” Ubani stated.
He stated that the prolonged delay had left a critical constitutional and fiscal issue hanging over the nation’s revenue administration system.
“As of today, in 2026, it has been five long years, half a decade of complete judicial silence on this critical multi-billion naira issue.
“State budgets, federal revenue planning and everyday taxpayer compliance are all floating under this massive unresolved constitutional cloud,” he said.
Ubani maintained that the dispute is based on whether VAT, as a consumption tax, falls within the taxing powers of the Federal Government or the residual powers of state governments under the 1999 Constitution.
He noted that VAT is not expressly listed in either the Exclusive Legislative List or the Concurrent Legislative List contained in the Constitution.
“The Constitution calls out taxes on incomes, profits, capital gains, stamp duties and customs, but VAT, a general consumption tax, is not expressly mentioned. This omission has sparked a high-stakes showdown over who actually holds the authority to collect this revenue,” he said.
The tax consultant traced the controversy to the replacement of state-administered sales taxes with the Value Added Tax Decree introduced by the military government in 1993.
According to him, while VAT continued to be centrally administered after the return to democratic rule in 1999, the constitutional basis for such federal control remained disputed.
“The transition from sales tax to VAT cannot automatically transfer the entire field of consumption taxation to the Federal Government under a democratic Constitution. The question remains one of constitutional allocation,” he added.
Ubani also cited the Supreme Court decision in the Attorney-General of Ogun State vs. Aberuagba, contending that the judgment recognised a distinction between federal authority over interstate and international trade and state authority over intrastate commercial activities.
He further noted that several states, including Lagos State, operated sales tax regimes after the return to civil rule, arguing that this historical practice supports the position that states have a constitutional role in consumption taxation.
The tax expert, however, stressed that regardless of the eventual outcome, the Supreme Court’s decision should provide certainty and preserve the principle of “one taxpayer, one window.”
He said, “If the answer favours the federating states, the transition should be orderly and implementation carefully done so that businesses do not face chaos or double taxation. If the answer favours the Federation, the reasoning should be clear enough to preserve the integrity of constitutional federalism.”
Ubani also called on the National Assembly and other political actors to consider a constitutional amendment after the Supreme Court’s ruling to eliminate any lingering ambiguities regarding VAT administration.
He pointed to models adopted in countries such as Australia, Canada and India, where constitutional or legislative frameworks clearly define the responsibilities of different levels of government in administering consumption taxes.
According to him, Nigeria has three possible pathways to resolving the dispute: granting states the authority to collect VAT on intrastate transactions, adopting a dual VAT system that shares responsibilities between the Federal Government and states, or amending the constitution to establish a harmonised VAT framework.
“The VAT controversy is a test of the maturity of Nigerian fiscal federalism. A federation that cannot resolve, within a reasonable time, who may tax the consumption of bread and salt within its own borders certainly has work to do on its constitutional architecture,” he said.
Ubani added, “The country awaits, with respect and unmistakable urgency, the voice of the Supreme Court and the leadership of the political branches. What is now needed is a clear and final interpretation.”
