VAT: Wike directs revenue agency to enforce law as court rejects FIRS injunction

Governor Nyesom Wike has directed the Rivers State Internal Revenue Service (RIRS) to ensure the full implementation and enforcement of the state’s Value Added Tax (VAT) law.

The governor’s directive followed the dismissal by the Federal High Court in Port Harcourt of an application by the Federal Inland Revenue Service (FIRS) for a stay of execution over the court’s judgment that declared Rivers State constitutionally empowered to collect VAT within its jurisdiction.

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Gov Wike, in a broadcast, asserted that with Monday’s judgement, the way was now clear for his administration to enforce the Rivers State Value Added Tax Law 2021 until otherwise set aside by a superior court.

“Consequently, I hereby direct the Rivers State Internal Revenue Service (RIRS) to ensure the full and total implementation and enforcement of this law against all corporate bodies, business entities and individuals with immediate effect,” Wike said.

“I wish to further assure every resident that we shall as usual make effective use of the expected proceeds from this tax to accelerate the development of our state and improve the wellbeing of everyone.”

Earlier, FIRS in suit no FHC/PH/CS/149/2020 had through a motion on notice applied for a stay of execution on the earlier judgement of the court presided over by Justice Stephen Dalyop Pam that declared that it was the constitutional role of state governments to collect VAT and not FIRS.

Justice Pam, in his ruling on FIRS’ application for a stay of execution, said granting the application would negate the principle of equity.

He noted that the Rivers State Government through its House of Assembly had duly enacted Rivers State Value Added Tax No 4, 2021, which made it a legitimate right of the state to collect VAT.

Justice Pam stated that since FIRS was ab initio acting in error by collecting VAT in Rivers State and had huge burden of refund of those monies there was need not to allow it incur further liability.

Reacting, FIRS in a statement by the Special Assistant to the Chairman of the FIRS on Media and Communications, Johannes Wojuola, urged taxpayers not to panic over the recent court.

It said: “For the avoidance of doubt, records of appeal have been transmitted to the appellate court. The Service is confident that, given the extant laws, the arguments and case put forward, it will earn a favoured judgment at the appellate court.”