The Federal Inland Revenue Service (FIRS) has warned taxpayers in the country not to stop paying their Value Added Tax (VAT) to it, based on a Rivers State Court judgment recently, so as to avoid facing penalties subsequently.
A statement today, August 23 by the FIRS chief spokesman, Dr. Abdullahi Ismail Ahmed, said that the warning is as a result of numerous enquiries on the judgment obtained by the Rivers State Government at the Federal High Court, Port Harcourt, which ruled that states, and not the Federal Government, are constitutionally empowered to collect VAT.
The statement entitled, “Rivers Judgment: FIRS Urges Taxpayers to Continue to Pay VAT,” Dr. Abdullahi said that since the Service has already appealed the Rivers judgment in which it is seeking a stay of execution order, the status quo ante subsists on the VAT collection authority, the taxpayers should continue to pay their VAT to the FIRS.
The FIRS statement reads in full: “The attention of the Federal Inland Revenue Service(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 9th August 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 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 Judgement 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, members of the public are advised to continue to comply with their Value Added Tax obligations until the matter is resolved by the appellate courts.”