The controversy on the legitimate body responsible for collecting Value Added Tax in Rivers state in recent times has proven to be a cat with nine lives, refusing to leave the scene. One would think that the recent ruling in favour of the Rivers State Government by a Federal High Court sitting in Port Harcourt would have laid the matter to rest but the opposite seems the case as the Federal Inland Revenue Service, FIRS is talking back strongly.

Rather than conceding to the Rivers State Government, the FIRS recently issued a statement urging taxpayers, especially in the state to continue remitting VAT to it as the judgment had been appealed, making the previous order of remittance valid except the court of appeal rule otherwise.

This statement also warned taxpayers of penalities in remitting to the state government and deadline which defies a recent bill signed into law by Nyesom Wike, the Rivers State Governor, authorizing Rivers State Government to henceforth collect Value Added Tax, VAT in the state.

As we await the ruling of the Court of Appeal over this matter, the back and forth between both parties is likely to continue.

What you should know

  • On August 9, 2021, in Suit No: CS/149/2020, the Federal High Court of Port Harcourt Division ruled out FIRS from the collection of VAT and acknowledged River State Government as legal collectors of VAT
  • The court also ruled that Rivers State Government, and not FIRS, an agent of the Federal Government is authorized by the Nigerian Constitution to collect personal income tax or VAT in the state.
  • The FIRS has sought a stay of execution order, urging that the status quo ante should subsist on VAT collection.
  • Both applications were heard on the 19th and 20th August 2021 and are awaiting the decision of the court.

Check out the FIRS’ statement as issued by its Director, Communications and Liaison Department; Abdullahi Ahmad.

“The attention of the FIRS has been drawn to the trending report that on 19/08/2021, the Government of Rivers State took steps to enact a Value Added Tax Law for Rivers State following the Judgment of the Federal High Court Port Harcourt Division on August 9, 2021, in Suit No: CS/149/2020.

“The suit was about who has the constitutional duty for the collection of VAT and Personal income tax in Rivers State.

“We wish to inform the general public that before the above-mentioned steps taken by the Government of Rivers State, FIRS had lodged an appeal against the above judgment and had also filed an application for stay of execution of the judgment as well asking the court for an injunction pending the determination of the appeal.

“All parties to the suit are aware that both applications were heard on the 19th and 20th August 2021 and are awaiting the decision of the court.

“Given that the Court of Appeal is yet to rule on the Appeal from the Judgment of Federal High Court and that the Federal High Court is yet to deliver a ruling on FIRS’s applications for stay of execution and injunction”

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