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Court nullifies Kano State law on consumption tax

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A Federal High Court in Abuja has nullified Kano State law that empowered it to collect consumption tax.

Justice John Tsoho delivered the judgment in a suit filed by the Nigeria Employers Consultative Association (NECA) and Retail Supermarkets Nigeria Limited, operators of Shoprite.

The judge set aside the provisions of Sections 96 and 97 of the Kano State Revenue Administration (Amendment) Law, No. 3 of 2017, which justified the collection.

The suit was filed against the Attorney-General of the Federation, Kano State Attorney-General and Kano State Inland Revenue Service.

The trial 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.

He declared that the imposition of consumption tax in Sections 96 and 97 of the state law over the same goods and services, which were already subject to Value Added Tax (VAT) amounted to double taxation.

Former Finance Minister, Dr. Ngozi Okonjo-Iweala, had by Order No. 77, 2015, added item 13 to the Schedule of the Taxes and Levies, Approved List for Collection Act (Amendment).

Consequent upon this, the Kano government had enacted the Revenue Administration (Amendment) Law, No. 3 of 2017.

In approaching the court, the plaintiffs said the law was unfair, unjust and prejudicial to their businesses, and the fortunes of NECA and Retail Supermarkets Nigeria Limited.

Joseph Nwobike & Co, who asked the court for interpretation of the laws, represented the plaintiffs.

They sought to know whether it did not amount to multiple taxation, having regard to the provisions of VAT Act, Cap VI, Laws of the Federation of Nigeria, 2004, which the Federal Government was already implementing.

They added that the consumption tax laws were already being implemented for the benefit of both the federal and states governments, including Kano.

The plaintiffs asked whether it was not unconstitutional, in view of the provisions of items 7, 8 and 9 of Part II of the Second Schedule to the 1999 Constitution.

They also cited the provisions of Section 7 (b) Item 13 of Schedule to the Taxes and Levies, Approval List for Collection Act (Amendment) Order No. 77, 2015.

In their preliminary objection, the defendants argued that the court did not have jurisdiction to hear the suit, and urged the court to dismiss the matter.

But Justice Tsoho in his judgment dismissed the preliminary objection.


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