Tax Acts: Dino Melaye threatens to sue NASS over VAT provisions

A legal practitioner and former senator representing Kogi West in the National Assembly, Senator Dino Melaye, has threatened to institute legal action against the National Assembly over the enactment of the Nigeria Tax Act 2025 and the Nigeria Tax Administration Act 2025, which contain provisions relating to the imposition, administration, collection and distribution of Value Added Tax (VAT).

In a letter dated December 15 and addressed to the Clerk of the National Assembly, which was received in the clerk’s office on December 16, Melaye warned that upon the expiration of a three-month pre-action notice, he would commence an action against the National Assembly before a court of competent jurisdiction.

The former Kogi senator, through his solicitors, Senator Dino Melaye Law Firm, noted that the VAT provisions in the Tax Acts enacted by the National Assembly vest legislative and administrative authority over VAT in the Federal Government and its agencies.

He contended that VAT is not provided for under either the Exclusive Legislative List or the Concurrent Legislative List in the Second Schedule to the Constitution of the Federal Republic of Nigeria 1999 (as amended).

According to him, by virtue of Section 4(7) of the Constitution, matters not included in the Exclusive or Concurrent Legislative Lists fall within the residual legislative competence of the states. He added that in line with Section 1(3) of the Constitution, any law inconsistent with the provisions of the Constitution is void to the extent of its inconsistency.

The letter, signed by a Senior Associate at the Senator Dino Melaye Law Firm, Ighodalo Anthony Aigbobo, therefore declared the VAT provisions of the Nigeria Tax Act and the Nigeria Tax Administration Act 2025 unconstitutional, ultra vires, null and void.

“We are legal practitioners to our client, Distinguished Senator Dino Daniel Melaye, a Nigerian citizen and taxpayer, and we hereby issue this statutory pre-action notice in compliance with Section 21 of the Legislative Houses (Powers and Privileges) Act, 2018.

“Take notice that our client shall, upon the expiration of three (3) months from the date of service of this notice, commence an action against the National Assembly before a court of competent jurisdiction.

“Facts giving rise to the intended action:

“The National Assembly enacted the Nigeria Tax Act and Nigeria Tax Administration Act of 2025, which contain provisions relating to the imposition, administration, collection and distribution of Value Added Tax (VAT).

“The said VAT provisions purport to vest legislative and administrative authority over VAT in the Federal Government and its agencies.

“VAT is not provided for under the Exclusive Legislative List or the Concurrent Legislative List in the Second Schedule to the Constitution of the Federal Republic of Nigeria 1999 (as amended).

“By virtue of Section 4(7) of the Constitution, matters not included in the Exclusive or Concurrent Legislative Lists fall within the residual legislative competence of the states.

“By Section 1(3) of the Constitution, any law inconsistent with the provisions of the Constitution is void to the extent of its inconsistency.

“The VAT provisions of the Nigeria Tax Act and the Nigeria Tax Administration Act 2025 are therefore unconstitutional, ultra vires, null and void,” the letter read in part.

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Melaye, who served in the Senate between 2015 and 2019, said his pre-action notice to the National Assembly was issued pursuant to Section 21 of the Legislative Houses (Powers and Privileges) Act, Cap L12, Laws of the Federation of Nigeria (LFN) 2004.

He stated that his intended action was founded on the provisions of Sections 1(1) and 1(3); Sections 4(2) and 4(7); and Section 162(1) of the 1999 Constitution (as amended), as well as Section 21 of the Legislative Houses (Powers and Privileges) Act, Cap L12, LFN 2004.

He declared that unless the “unconstitutional provisions” on VAT were withdrawn, he would seek the following reliefs:

“A declaration that by virtue of the provisions of Section 4(2)(4)(a) of the Constitution of the Federal Republic of Nigeria, the 1st and 2nd defendants lack the powers to legislate over Value Added Tax.

“A declaration that the 1st and 2nd defendants have no constitutional authority to impose and administer Value Added Tax.

“A declaration that the legislation of the 1st defendant on Value Added Tax is unconstitutional and therefore null and void.

“A declaration that Section 3(1)(a)(v) of the Nigerian Tax Administration Act 2025 is void, except as provided for by the Constitution.

“A declaration that only the Houses of Assembly of the states have the constitutional powers to legislate on Value Added Tax.

“A declaration that the VAT provisions in the Nigeria Tax Act 2025 are inconsistent with the provisions of Section 4 of the Constitution of the Federal Republic of Nigeria 1999 (as amended).

“A declaration of perpetual injunction restraining the defendants, by themselves, their servants, agents, privies or howsoever, from demanding, enforcing or otherwise dealing in any manner with Value Added Tax in or for any state of the federation, except through state governments or agencies lawfully empowered by the state governments to administer and impose VAT under existing state VAT legislation.

“An order directing the defendants to refund forthwith to the affected state governments all sums collected pursuant to Section 3(1)(a)(v) of the Nigerian Tax Administration Act 2025 as VAT, and for such further orders as this honourable court may deem fit to make in the circumstances of this case.”

Melaye, who was the Peoples Democratic Party (PDP) standard-bearer in the November 11, 2023 Kogi State governorship election, further demanded that, “in the interest of constitutional compliance and avoidance of unnecessary litigation,” there should be an immediate suspension and repeal of the VAT provisions contained in the Nigeria Tax Reform Act 2025.

He added that failure to comply with this demand within three months from the date of service of the notice would result in the commencement of legal proceedings without further notice.