Babajide Sanwo-Olu, Governor of Lagos State, has signed the state Value Added Tax (VAT) Bill into law.
Gbenga Omotosho, State Commissioner for Information disclosed this in a statement on Friday.
“Lagos State Governor Babajide Sanwo-Olu has signed into law the State VAT Bill as passed by the House of Assembly.
“The Governor signed the ‘bill for a law to impose and charge VAT on certain goods and services’ at about 11.45am today, after returning from an official trip to Abuja. By this act, the Bill has now become a Law,” Omotoso said.
The Lagos State House of Assembly had on Thursday unanimous passed the bill.
Consumers pay VAT when they purchase goods or obtain services. All goods and services (produced within or imported into the country) are taxable except those specifically exempted by the VAT Act.
The VAT rate was raised in Nigeria from five percent to 7.5 percent in 2020.
VAT collection by the Federal Inland Revenue System (FIRS) on behalf of the Nigerian government has been a subject of controversy.
The FIRS, which administers the tax, transfers the generated revenue to the three levels of government via the federation accounts allocation committee (FAAC).
Recently, a court in Port Harcourt restrained FIRS from the collection of VAT and empowered the Rivers state government to take charge.
After the ruling, the Lagos state government began to domesticate a law to guide the collection of its VAT and warned FIRS to obey the Rivers ruling.
Governor Nyesom Wike of Rivers State on Thursday signed into law the bill on Value-Added Tax (VAT) collection in the state.
Wike signed the bill which was recently passed by the state House of Assembly at the Government House, Port Harcourt.