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Thursday, May 19, 2022

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FIRS insists on collecting VAT despite court ruling, citing pending appeal

The Nigerian tax agency, the Federal Inland Revenue Service (FIRS) has directed companies and other taxpayers to continue the payment of their Value Added Tax (VAT) to their revenue collector.

In a statement by the service director of communication on Sunday, Abdullahi Ismaila Ahmad said the FIRS failure on the part of taxpayers to fulfil their obligations will attract penalties.

The directive was sequal to the recent judgment by a Port Harcourt division of the Federal High Court which nolified the power of the federal government to collect VAT and income tax.

The Court presided over by Justice Stephen Dalyop Pam also issued an order of 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.

In the ruling in suit No. FHC/PH/CS/149/2020, filed by the Attorney-General for Rivers State (plaintiff), against the FIRS (first defendant) and the Attorney-General of the Federation (second defendant), Justice Pam granted all the eleven reliefs sought by Rivers State.

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He stated that there was no constitutional basis for the FIRS to demand for and collect VAT, Withholding Tax, Education Tax and Technology levy in Rivers State or any other state of the Federation.

However, Ahmad in a statement said the insistence for the VAT payment into its coffer because the Rivers State government had taken steps to enact a VAT law in the state.

“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.

“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 judgment of the Federal High Court and that the 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 VAT obligations until the matter is resolved by the appellate courts,” the FIRS stated.

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