ENFORCEMENT OF VALUE ADDED TAX ACT VERSUS CONSUMPTION TAX UNDER THE NIGERIA LAW: THE REGISTERED TRUSTEES OF HOTEL OWNERS AND MANAGERS CASE IN PERSPECTIVE

Abstract

Value Added Tax is used sometimes interchangeably with consumption tax. Whereas Value Added Tax (VAT) is charged and paid on the supply of goods and services generally, consumption tax is however imposed on the sale or use of goods and services mostly consumed in hotels, restaurants, event centres and others. The controversy over who has the power to impose VAT and not consumption tax had prolonged. The VAT by its provisions appears to have covered the field on the taxation of the supply of goods and services including consumption tax. While the states in Nigeria insist that they are entitled to the exclusion of any other body to enact laws on consumption of goods and services, the federal government insists that to the exclusion of any other body it has the power or entitled to impose and collect tax on the supply of all goods and services within the state. The work appraises this controversy and its attendant consequences. The doctrinal method of data collection was adopted and analytical approach used in reviewing the research materials like the constitution, taxing statutes, judicial decisions, textbooks, relevant journals article and internet sources. The paper discovered that the attempt by the states to collect tax and generate revenue on consumption tax greatly encroached on the operation of VAT. The operations of the VAT Act ought to be on inter-state and international trade and commerce. It was further discovered that the major sections of the VAT Act have been nullified leaving the VAT Act totally disjointed. Further enforcement of VAT Act means that a new VAT regime should be enacted. Sections 2, 4, 5, 6,7,8,9, and 11 having been nullified, the VAT Act seized to be a predominant paramount legislation over consumption tax.