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Tuesday, April 23, 2024

FIRS Gets Succour, as Appeal Court Orders Rivers, Lagos to Stay Action on VAT Collection

FIRS Gets Succour, as Appeal Court Orders Rivers, Lagos to Stay Action on VAT Collection

The Federal Inland Revenue Service (FIRS), had approached the Court of Appeal seeking a stay of execution of the order of a Rivers State High Court which gave the state the mandate to collect Value Added Taxes (VAT), and the appellate court on Friday gave an order in favour of the agency.

The Court of Appeal in Abuja stopped the governments of Rivers and Lagos from collecting the VAT in the meantime.

Justice Haruna Simon Tsanami, who led a three-man panel of the appellate court, ruled on Friday that the law passed by Rivers State House of Assembly and assented to by Governor Nyesom Ezenwo Wike be put on hold.

The court held that since parties had submitted themselves to its jurisdiction for adjudication on the issue, they must not do anything that will destroy the subject matter of the appeal.

Specifically, Mr Tsanami granted “status quo ante bellum” in favour of the Federal Inland Revenue Service (FIRS) and against the respondents.

The suit was then fixed for September 16, 2021, for hearing of an application by the Lagos State government to join the suit.

FIRS in an appeal marked CA/PH/282/2021, is praying the court to set aside the judgment of the Federal High Court, in Port Harcourt, the Rivers State capital, which granted power to the state government to collect VAT.

It also asked the appellate court to stay the execution of Rivers’ judgment.

Recently, the Federal High Court in Port Harcourt in a verdict held that it was unconstitutional for the FIRS to collect VAT and personal income tax in Rivers State.

Besides that, the court had ruled that Rivers State Government, and not the agent of the Federal Government – the FIRS – was authorised by the Nigerian Constitution to collect personal income tax in the state.

As a result of the High Court ruling, both Governor Wike of Rivers State and Governor Babajide Sanwo-Olu of Lagos State, had signed into law bills authorising the state governments to collect VAT, a move being resisted by the FIRS.

 

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