NECA secures landmark judgement against Kano State on Consumption Tax

The Nigeria Employers’ Consultative Association (NECA), the umbrella body for Organized Private Sector and the Voice of Business in Nigeria, has secured a landmark judgment at the Federal High Court against the Kano State Revenue Administration (Amendment) Law, 2017. The Court in its ruling invalidated the Consumption Tax provisions of the Kano State Revenue Administration (Amendment) Law, 2017.

Speaking in Lagos, the Director General of NECA Mr. Olusegun Oshinowo remarked that: “the legal action became necessary due to the fact that the Kano State Government through its Kano State Revenue Administration (Amendment) Law 2017 had introduced and imposed a Consumption tax. The tax was payable by Consumers of goods and services bought or rendered in any hotel, restaurant, eatery, bakery, suya spot, shopping mall, store, event centre and other similar businesses in the State”. According to him, “it amounts to a tax on the same goods and services, to which the provisions of the Value Added Tax Act, already applied”.

Speaking further, he averred that: “the Court determined all the questions in favour of NECA and granted the reliefs sought. The Court set aside the provisions of the Kano State Revenue Administration (Amendment) Law 2017, as it amounted to the duplication of the Value Added Tax”.

Mr. Oshinowo added that “the court further restrained the Government of Kano State and the Kano State Inland Revenue Service from implementing the provisions of the Kano State Revenue Administration (Amendment) Law 2017.

Mr. Oshinowo particularly deplored a situation where businesses are exposed to double and/or multiple taxations. He noted that “at the last count, businesses in Nigeria are encumbered with the payment of over fifty-five (55) different taxes at the three levels of government. The incidence of double taxation, particularly consumption tax, has assumed a very dangerous dimension, which we expect the Federal Government to rein in through an appropriate statutory or policy declaration.”

The Association expressed its confidence in the Rule of Law in Nigeria thus the recourse of NECA to the judiciary for relief in the face of illegality foisted upon its members” NECA urged other State Governments to operate within the ambit Law, noting that government should not burden businesses with taxes, rather it should create an enabling environment for businesses to thrive and continue to contribute to the growth of the nation.”