Business Post Contributor
By Sodeinde Temidayo David
A court of appeal sitting in Abuja has directed the Federal Inland Revenue Service (FIRS) and the Rivers State government to maintain status quo over the controversies surrounding the collection of value-added tax (VAT) in the state.
The Rivers State government had obtained a court judgement in August, authorising it to collect VAT in the state instead of the FIRS.
It, thereafter, held a stakeholders’ meeting this week with corporate organisations operating in the oil-rich state, warning them to stop making the payment to the federal tax agency.
This did not go down well with the FIRS, which initially approached a federal high court to obtain a stay of execution, but its application was thrown. This pushed the agency to approach the appellate court to upturn the decision of the lower court.
On Friday, just a day after the Lagos State House of Assembly passed its VAT bill and filed an application to be joined in the suit as a co-respondent in the suit filed by the FIRS, the appeal court at the nation’s capital asked the parties involved in the matter to maintain the status quo and refrain from taking any action that could give effect to the judgement of the federal high court or Rivers State, pending the hearing and determination of the instant suit.
The ruling at the high court in Port Harcourt on August 10 that the FIRS has no constitutional power to collect VAT and Personal Income Tax in Rivers State had spurred other states to consider establishing their VAT laws to give authority to their tax agencies to do the function.
