This is a very consequential outcome and if the Supreme Court aligns, Nigeria would be completely different in years: “The suit filed by the Federal Inland Revenue Service (FIRS) seeking to stop the Rivers State Government from commencing collection of Value Added Tax (VAT) has been dismissed Federal High Court sitting in Port Harcourt, Rivers State.”
Now if Lagos state follows along, the Nigerian design will begin to happen. I think fiscal federalism would be good for the competitiveness of Nigeria where comparative advantages begin to play. But it all depends on how the Supreme Court, after the Court, sees this big legal battle for the future of Nigeria.
FIRS should withdraw its appeal: it is time for Nigeria to have internal competition. By the time Abia state does not get money from Abuja, we will be forced to fix Aba.
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The suit filed by the Federal Inland Revenue Service (FIRS) seeking to stop the Rivers State Government from commencing collection of Value Added Tax (VAT) has been dismissed Federal High Court sitting in Port Harcourt, Rivers State.
Last month, a Federal High Court had declared the collection of VAT by federal government in states, unconstitutional. The tax agency had approached the court praying a Stay of Execution on the judgment.
According to Vanguard, Justice Stephen Dalyop Pam, in his ruling, said granting the application would negate the principle of equity. He noted that in as much as the state government and the state legislature has enacted a law in respect of the VAT that courts were bound to obey laws.
He noted that the Rivers State Government and the State Assembly, have duly enacted Rivers State Value Added Tax No. 4, 2021, which makes it a legitimate right of the state to collect VAT.
Meanwhile, despite the inability of FIRS to get the prayer sought, it is not giving up, asking taxpayers to continue to pay VAT to it.
Despite the latest development in court, Johannes Wojuola, the special assistant to the chairman of the FIRS on Media and Communications, in a statement Monday urged taxpayers to “remain calm” and maintain the “status quo”.
“The FIRS having lodged, in the Court of Appeal, both an appeal against the decision of the Federal High Court sitting in Rivers State in Suit No. FHC/PH/CS/149/2020, Attorney General of Rivers State Vs Federal Inland Revenue Service, and an injunction pending appeal of the said judgement, assures taxpayers that there is no cause for alarm.
“The Federal High Court ruling should not breed any confusion as to the obligations of taxpayers. Taxpayers must continue to comply with the Value Added Tax Act pending the final determination of appeal,” the statement said.
He said taxpayers “must” continue to pay their tax to the FIRS to avoid paying penalties for failure to do so.
“For the avoidance of doubt, records of appeal have been transmitted to the appellate court. The Service is confident that, given the extant laws, the arguments and case put forward, it will earn a favoured judgment at the appellate court,” the statement concluded.
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