As the battle of wits rages between the Rivers State government and the Federal Inland Revenue Service over the collection of the Value Added Tax (VAT), the Lagos State House of Assembly on Thursday passed its own version of the bill that will give the state government the powers to commence the collection and utilisation of proceeds from VAT.
Meanwhile, following the Federal Inland Service Service (FIRS) directive to corporate organisations in Rivers State to continue to pay their VAT to it despite a court judgment to the contrary, State Governor Nyesom Wike, Wednesday threatened to take over all offices of the agency in the state for bullying his government.
In Lagos, Speaker Mudashiru Obasa who presided at the session that passed the VAT Bill, immediately directed the Acting Clerk of the House, Mr. Olalekan Onafeko, to transmit a clean copy to Governor Babajide Sanwo-Olu for assent.
On Wednesday, the Group Lead, Special Tax Operations at FIRS, Mr. Matthew Gbonjugbola, was however insisting it was the exclusive right of the agency to collect VAT in the country, adding that the service has appealed the judgement of the Federal High Court in Rivers which held that the agency does not have the right to collect Value Added Tax (VAT) in the state.
The Service had Monday lost another suit in the same court asking for a Stay of Execution of the judgment.
Gbonjugbola explained that the law mandating the FIRS to collect VAT seeks to protect businesses from multiple taxes.
“I can confirm to you that FIRS indeed approached an appellate court to review the judgement of the lower court at the Federal Court of Appeal in Rivers.
“Be assured that FIRS has filed an appeal and that one is in process and that is why we are not able to speak,” he said.
In Port Harcourt, the state capital, Wike told the oil firms, construction companies and other business owners operating in the state to start remitting their Value Added Tax to the state government this month.
Worse for FIRS, the Lagos State Government, the highest VAT payer in the country, began its own moves to collect the taxes. T0he House of Assembly deliberating on a bill in that direction.
Wike, on Wednesday, lamented the injustice in the country saying Rivers generated N15bn in June 2021 but got N4.7bn while “Kano produced N2.8bn in June but Kano also got N2.8bn. Sometimes you don’t want to believe these things exist.”
The governor said he could not continue to beg the Federal Government for what belongs to his state.
He added: “I overhead the FIRS chairman saying that he will show me the powers of the Federal Government that the Federal Government will muzzle the judiciary. It is not my business. The court has decided.
“All these bullying (by) FIRS. They should mind the state they are bullying. FIRS should be very careful. You don’t bully a state like us…I have the political will to do a lot of things. I am not one of those governors that will shy away. If they continue to bully us, all their offices in the state, I will take.
“I will seal off your premises if you continue paying VAT to FIRS
He announced that the government will begin to collect VAT this month adding that the government will seal up the premises of companies that fail to comply with the new directive.