NECA and Retail Supermarkets Nigeria Limited wins…..

The Federal High Court in Abuja has struck down sections 96 and 97 of the Kano State Revenue Administration (Amendment) Law, No. 3 of 2017, which empowers the state to collect consumption tax.

The court, in a judgment by Justice John Tsoho,  declared that the imposition of the consumption tax vide sections 96 and 97 of the Kano State law, over the same goods and services which were already subject to Value Added Tax, amounted to double taxation. The judge also set aside Section 7(b) Item 13 of the Schedule to the Taxes and Levies (Approved List for Collection) Act (Amendment) Order No. 77, 2015.

The judgment was given in favour of the Nigeria Employers’ Consultative Association (NECA) and Retail Supermarkets Nigeria Limited – operators of Shoprite. The defendants in the suit were the Attorney General of the Federation, the Kano State Attorney General and Commissioner for Justice and the Kano State Inland Revenue Service. The plaintiffs had in the suit contended that the Kano State consumption tax was “unfair, unjust and prejudicial to their businesses.” They urged the court to determine “whether having regard to the provisions of the Value Added Tax Act, Cap VI, Laws of the Federation of Nigeria, 2004, which are already being implemented by the Federal Government as consumption tax for the benefit of both the federal and states governments, the provisions of sections 96 and 97 of the Kano State Revenue Administration (Amendment) Law, No. 3 of 2017, did not amount to double and multiple taxation.”

They contended that sections 96 and 97 of the Kano State Revenue Administration (Amendment) Law, No. 3 of 2017 were inconsistent with items 7 and 8 of Part II of the Second Schedule to the Constitution, and, thus, null and void.

In his judgment, Justice Tsoho dismissed the preliminary objection filed by the defendants challenging the court’s jurisdiction to entertain the suit.