The stage appears set for a battle royal as the Federal Inland Revenue Service(FIRS) has told taxpayers in the country to continue to pay their Value Added Tax (VAT) to the FIRS in order to avoid facing penalties for failing to do so.
A Federal High Court in Port Harcourt ruled weeks ago that it was that the Rivers State Government should collect VAT in the state.
But the FIRS in a statement said it issued the directive following numerous enquiries to the Service because of the judgment of the Port Harcourt court, which ruled that states, and not the Federal Government, are constitutionally empowered to collect VAT.
In a statement titled, “Rivers Judgment: FIRS Urges Taxpayers to Continue to Pay VAT”, the FIRS disclosed that since the Service has already appealed the Rivers judgment in which appeal it is seeking a stay of execution order, the status quo ante subsists on the VAT collection authority, hence taxpayers should continue to pay their VAT to the FIRS.
The FIRS statement reads in full: “The attention of the Federal Inland Revenue Service (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 9th August 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 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 Judgement 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, members of the public are advised to continue to comply with their Value Added Tax obligations until the matter is resolved by the appellate courts.”
