A bill proposing to place Value Added Tax under the Exclusive Legislative List has passed its second reading in the House of Representatives.

The legislation is jointly sponsored by Deputy Speaker Benjamin Kalu, along with Chris Nkwonta, Daniel Ago, Nkemkanma Kama, Tolani Shagaya, Alex Egbona, and Joshua Gana.

Leading the debate during Wednesday’s plenary, Joshua Gana, who represents the Lavun/Mokwa/Edati Federal Constituency of Niger State, said the bill aims to eliminate the confusion surrounding VAT collection.

“The bill seeks to bring order where confusion reigns, to create clarity where overlaps have persisted, and to ensure that every naira raised, shared, or spent by government is traceable, lawful, and transparent.

“At the heart of this bill is a simple but transformative goal, which is to align the revenue powers of the federation, states, and local governments in a way that promotes efficiency, discourages duplication, and restores trust in the fiscal system.

“The fiscal architecture of our federation has, over time, become congested and conflicting. Multiple taxes and levies are imposed at different tiers of government, often on the same taxpayer. Revenue agencies overlap, leading to inefficiencies and litigation over collection rights, as seen in disputes over Value Added Tax (VAT), stamp duties, and personal income tax.

“In many instances, private consultants or agents are unlawfully contracted to collect taxes and levies, giving room for corruption, harassment, and revenue leakages.

“These dysfunctions weaken our ability to plan budgets accurately, erode investor confidence, and alienate citizens from government. To strengthen our budgetary process, therefore, we must first strengthen the foundation of fiscal order, and that is precisely what this bill does,” he said.

The bill, comprising four key clauses, seeks to specify that stamp duties collected by the federal government apply solely to documents or transactions involving corporate entities, while those arising from individual transactions fall under the purview of state governments.

It further proposes adding a new item — Value Added Tax (VAT) or consumption tax — to the Exclusive Legislative List to promote national uniformity, predictability, and provide a clear constitutional foundation for the administration of VAT by the federation.

Gana stated that if enacted, the bill would minimize intergovernmental conflicts over revenue collection, strengthen fiscal coordination among the three tiers of government, and enhance budget predictability, allowing for more effective expenditure planning.

In 2021, the Federal Inland Revenue Service (FIRS) urged the National Assembly to place VAT collection under the Exclusive Legislative List.

The request followed a legal dispute between the FIRS and the Rivers State Government over the authority to collect Value Added Tax and Personal Income Tax within the state.