Governor Nyesom Wike
By Egufe Yafugborhi, PORT HARCOURT
A Federal High Court in Port Harcourt, on Monday, dismissed an application by the Federal Inland Revenue Service, FIRS, seeking to stop Rivers State government from enforcing an earlier court judgement vesting the power to collect Value Added Tax, VAT, within Rivers State on the state government and not FIRS.
FIRS had through a motion on notice applied for a stay of execution on the earlier judgement delivered by Justice Stephen Pam, affirming the constitutional role of the state governments to collect VAT and not FIRS.
Justice Pam, in his ruling on the FIRS application for a stay of execution, said granting same would negate the principle of equity.
He noted that the Rivers State Government through the state assembly, has duly enacted Rivers State Value Added Tax No. 4, 2021, which makes it a legitimate right of the state to collect VAT.
According to the judge, every court in the country is constitutionally mandated to obey every legislation enacted by both the national and state assemblies.
He explained that the Rivers State government law on VAT remains valid until it has been set aside by a court of competent jurisdiction.
Justice Pam stated that since FIRS was, ab initio, acting in error by collecting VAT in Rivers State, and has huge burden of refund of those monies, there was need not to allow it incur further liability.
The judge declared that the FIRS application is refused and dismissed in the light of the fact that all subsisting law concerning the collection of VAT stands in favour of the Rivers State government.
We will appeal, FIRS reacts as Wike cautions taxpayers
Counsel to FIRS, Reuben Wanogho, said the court had delivered its ruling on the basis of how it saw the facts of the case before it, adding his client would challenge the court decision.
Meanwhile, Governor Nyesom Wike, following the latest judgement, has warned that severe sanctions await taxpayers who refuse VAT and sundry taxed payments to the Rivers government in compliance with the court order.
Wike, in a state wide broadcast declared, “Consequently, I hereby direct the Rivers State Revenue Service, RSRS, to ensure the full and total implementation and enforcement of this law against all corporate bodies, business entities and individuals with immediate effect.
“All corporate bodies, business entities and individuals are advised to willingly, truthfully and promptly comply with their tax obligations under this law to avoid the full weight of the stipulated sanctions, including having their business premises sealed-up.
“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.”
The governor explained that what the Rivers Sate Government has done is to contribute to the advancement fiscal federalism, in which states can feel empowered to explore their potentials to generate internal revenue to address their development needs.