The Federal Inland Revenue Service (FIRS) has filed an appeal against the judgement by Justice Stephen Dalyop Pam of the Federal High Court in Port Harcourt, Rivers State, on the issue of who has the constitutional mandate to collect Value Added Tax (VAT).
Recall that the judge had, in a landmark judgement on August 9, declared that the Rivers State government and not the FIRS, an agency of the federal government, should collect VVAT and Personal Income Tax (PIT) in the state.
In the judgement, the court issued a perpetual injunction restraining the FIRS and the attorney general of the federation, both first and second defendants in the suit, from collecting, demanding, threatening and intimidating residents of Rivers State to pay to FIRS, personnel income tax and VAT.
The judge held that there was no constitutional basis for the FIRS to demand and collect VAT, withholding tax, education tax, and technology levy in Rivers or any other state of the federation.
It maintained that the constitutional powers and competence of the federal government were limited to taxation of incomes, profits and capital gains, which did not include VAT or any other species of sales, or levy other than those specifically mentioned in items 58 and 59 of the Exclusive Legislative List.
However, spokesman for Mr. Abdullahi Ismaila Ahmad said in a statement that the agency would challenge the ruling.
The statement obtained reads: “This is to inform the general public that the Federal Inland Revenue Service has lodged an appeal against the judgment of the Federal High Court, Port Harcourt Judicial Division, delivered by Honourable Justice Stephen Pam, in SUIT NO. FHC/PH/CS/149/2020-ATTORNEY GENERAL OF RIVERS STATE v. FEDERAL INLAND REVENUE SERVICE & ANOTHER.
“We have also sought an injunction pending appeal and a Stay of Execution of the said judgement.
“As the decision is being appealed and in view of the pending applications for injunction and stay of execution, which the FIRS has filed in court against the judgement, members of the public are advised to continue to comply with the Value Added Tax obligations until the matter is resolved by the appellate courts in order to avoid accruing the consequent penalties and interest for non-compliance.
“As the decision is being appealed and in view of the pending applications for injunction and stay of execution which the FIRS has filed in court against the judgement, members of the public are advised to continue to comply with the Value Added Tax obligations until the matter is resolved by the appellate courts in order to avoid accruing the consequent penalties and interest for non-compliance.”
