Read this Facebook post by Rivers State governor, Governor Wike, as the battle for who collects VAT in Rivers state rages.

In a stakeholders meeting, the governor noted that he would go after the Federal Inland Revenue Service (FIRS) if they do not cease from attempting to collect VAT in Rivers State.

He said, “People say that let heaven not fall but sometimes I believe that heaven should come down so that everybody will rest…When we do the right thing, heaven is at peace. So, the right thing must be done at all times.

“Rivers State is challenging FIRS from collecting VAT in Rivers State. I am not challenging FIRS from collecting VAT in Abuja. Let it be understood. But the law says Rivers must collect VAT in the state.”

“The Federal Government surreptitiously lobbied to amend the constitution to place VAT collection under the exclusive legislative list. We have challenged it and we have no apologies to anybody.

“I don’t want to be in the good book of anybody but in the good book of God. You don’t bully a state like us. FIRS should be very careful. I have the political will to do a lot of things. If they continue to bully us, I will take all their offices in the state.’’

Lagos State Joins Rivers State

Lagos state has joined this fray passing a bill to also be in charge of its own VAT collection. The governor has signed it into law: “Governor Babajide Sanwo-Olu of Lagos State has signed into law the State Value-Added Tax Bill as passed by the House of Assembly days after Rivers State government took the same route.”

“The governor signed the ‘bill for a law to impose and charge VAT on certain goods and services’ at about 11.45 a.m. on Friday after returning from an official trip in Abuja,” Gbenga Omotoso, the commissioner for Information and Strategy, said in a statement.

“By this act, the bill has now become a law,” he added.

The Lagos State House of Assembly transmitted a clean copyof the VAT Bill to Mr Sanwo-Olu on September 9, through the acting clerk of the House, Olalekan Onafeko.

Appeal Court Rules on River State

The Court has ruled that Rivers State and FIRS should pause this VAT battle until the court concludes. FIRS appealed the ruling or High Court which said that Rivers State has the right to collect VAT in the state. FIRS pushed for a state of execution which was not granted. Now, the appeal court wants all the parties to pause until it finishes its works.

The Court of Appeal in Abuja, on Friday, ordered the Rivers and Lagos state governments to stay action on their bids to collect Value Added Tax (VAT) pending the resolution of the legal dispute on the matter.

A three-man panel of the appellate court ordered that the enforcement of the judgment of the Federal High Court, Port Harcourt, latched on to by the state governments be put on hold.

Haruna Tsanami, the judge who delivered the lead ruling of the panel, also suspended the operation of the law passed by the Rivers State House of Assembly and assented to by Governor Nyesom Wike, for the collection of VAT by the State government.

Value added tax (VAT) is a consumption tax paid when goods are purchased and services are rendered, and it is currently set at 7.5 per cent in Nigeria.

Court Declares VAT Collection by Nigeria Unconstitutional

Coinbase, the US-based cryptocurrency exchange, is not happy about something. That thing has to do with Wells notice. A Wells notice is the official way a regulator tells a company it intends to sue the company in court. The United States Securities and Exchange Commission has alerted Coinbase that it was coming.

Then, Brian Armstrong, the CEO of Coinbase went to Twitter to “report” the Securities and Exchange Commission. Yes, Mr. Armstrong took to Twitter to share his thoughts and clarify the situation with the SEC early Wednesday morning. “Some really sketchy behavior coming out of the SEC recently,” he began, adding:

Ostensibly the SEC’s goal is to protect investors and create fair markets. So who are they protecting here and where is the harm? People seem pretty happy to be earning yield on these various products, across lots of other crypto companies.

“Shutting these down would arguably be harming consumers more than protecting them, and by preventing Coinbase from launching the same thing that other companies already have live, they’re creating an unfair market,” he argued.

Armstrong further opined: “If we end up in court we may finally get the regulatory clarity the SEC refuses to provide. But regulation by litigation should be the last resort for the SEC, not the first.”

My Question: is this a possibility in Nigeria where SEC and the Central Bank of Nigeria can unilaterally SUSPEND, PAUSE, BAN and do whatever they like without engaging companies? But here, a company is essentially reporting its regulator being confident that the court will do its work. People, we need to advance our corporate democratic systems in Nigeria.

1/ Some really sketchy behavior coming out of the SEC recently.
Story time…

— Brian Armstrong ?? (@brian_armstrong) September 8, 2021

Courtesy of Nairametrics, this is the 2015 Central Bank of Nigeria (CBN) circular that is causing problems for forex-trading fintech companies (companies which enable Nigerians to buy foreign stocks): “For the avoidance of doubt, any Authorized Dealer that is found to have used funds from interbank, export proceeds and bureau de change to consummate these items classified as Not Valid for Forex or undertakes money wire transfer for a BDC shall be sanctioned appropriately.”

The apex bank has used a court order to freeze the bank accounts of Chaka, Bamboo and related companies in the nation as it examines forex-related transactions.

The circular was issued on July 01, 2015, titled: “RE- Inclusion of some imported goods and services on the list of items not valid for foreign exchange in the Nigeria foreign market.”

The circular itemized a list of 41 products not valid for foreign exchange at the Nigerian foreign exchange widow, and the 41st product was Euro bond/ foreign currency Bond/ shares. This gave the CBN a formidable footing to tackle these companies whose sole business was to provide Nigerians with access to foreign financial instruments.

“For the avoidance of doubt, any Authorized Dealer that is found to have used funds from interbank, export proceeds and bureau de change to consummate these items classified as Not Valid for Forex or undertakes money wire transfer for a BDC shall be sanctioned appropriately.” – CBN.

Therefore, the CBN sort to penalize those that violated its directives as it filed a motion with the Federal High Court sitting, Abuja. The Defendants are Rise Vest Technologies Limited, Bamboo Systems Technology Limited, Bamboo Systems Tech. Ltd OPNS, Chaka Technologies Limited, CTL/Business Expenses, and Trove Technologies Limited.

Meanwhile, the court has (temporarily) unfrozen the bank accounts of some of the companies to enable them pay rents and salaries: “The Federal High Court, Abuja, on Tuesday, granted the request of Bamboo Systems Technology Limited and Bamboo Systems Tech. Ltd., to temporarily unfreeze their accounts.

The order from the court follows the filing of an application by both firms asking for a variation of the order made by the court to allow the companies have access to its funds to pay rent and workers’ salaries.”

I remain of the opinion that Nigeria can investigate these companies while they are operating at full capacity. If not, after 6 months, the duration of the freeze, some may be financially incapacitated to be relevant.

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