The Federal Inland Revenue Service (FIRS) has asked taxpayers to continue to pay their Value Added Tax (VAT) to the agency and not to the Rivers State Government to avoid the penalties for failure to do so.
The clarification from the agency follows numerous inquiries after the recent judgment from a Federal High Court in Port Harcourt obtained by Rivers State Government, which said that VAT should be collected by state governments and not the FIRS.
The directive was contained in a statement issued by the Director, Communications and Liaison Department of FIRS, Mr. Abdullahi Ahmad, on Sunday in Abuja.
The FIRS spokesperson explained that since the organisation had already appealed the judgment, in which it sought a stay of execution order and that the status quo ante should subsist on VAT collection adding that taxpayers should continue to pay their VAT to the FIRS.
What the FIRS statement is saying
The statement from the FIRS Spokesperson reads, “The attention of the FIRS has been drawn to the trending report that on 19/08/2021, the Government of Rivers State took steps to enact a Value Added Tax Law for Rivers State following the Judgment of the Federal High Court Port Harcourt Division on August 9, 2021, in Suit No: CS/149/2020.
“The suit was about who has the constitutional duty for the collection of VAT and Personal income tax in Rivers State.
“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 the 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 Federal High Court and that the Federal High Court is yet to deliver a ruling on FIRS’s applications for stay of execution and injunction.’’
Ahmad urged the public to continue to comply with their VAT obligations until the matter is resolved by the appellate court.
In case you missed it
- It can be recalled that on August 9, 2021, the Federal High Court sitting in Port Harcourt declared that it is the Rivers State Government and not the Federal Inland Revenue Services (FIRS) that should rightfully collect Valued Added Tax (VAT) and Personal Income Tax (PIT) in the state.
- Subsequently, the Rivers State Governor, Nyesom Wike, immediately went ahead to sign into law the bill VAT collection in the state following the quick passage of the bill by the Rivers State House of Assembly after a Federal High Court in Port Harcourt judgment.
- The FIRS has, however, appealed the judgment by the Federal High Court in Port Harcourt, asking for a stay of execution pending the determination of the appeal, while also asking taxpayers to continue to meet their tax obligations with the federal government including VAT.
