In a landmark ruling, a Federal High Court in Asaba has nullified the Delta State Government’s 5% consumption tax on transactions that are already covered by the federal Value Added Tax (VAT) regime. The court ruled that the state government does not have the power to impose such a tax, as it conflicts with the federal VAT law.
According to Punch Newspapers, the case was brought before the court by some business owners who argued that the state’s tax was double taxation and unconstitutional. The court agreed with their arguments, stating that the state government cannot impose a tax on transactions that are already subject to the federal VAT.
This ruling could have significant implications for businesses operating in Delta State, as it clarifies the jurisdiction of both the federal and state governments in matters of taxation. It also underscores the importance of adhering to the principles of federalism and constitutional law in Nigeria’s complex tax regime.
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