VAT collection: Rivers, FIRS to resume legal firework in May

The court of appeal sitting in Port Harcourt will resume hearing on the appeal filed by the Federal Inland Revenue Service (FIRS) against the Rivers state government over the collection of value-added tax (VAT) and personal income tax (PIT) on May 9.

VAT is a consumption tax paid when goods are purchased and services are rendered. It is charged at a rate of 7.5 per cent

Emmanuel Ukala, a Senior Advocate of Nigeria (SAN) and lawyer representing Rivers state, disclosed this at the weekend.

Respective parties to the suit have been asked to submit written applications ahead of the sitting. The issue of VAT collection had generated a legal battle between FIRS and some state governments.

Rivers and Lagos state governments had enacted laws and called for decentralisation of collection, while some states pushed for centralised collection.

It can be recalled that on August 9, 2021, a Federal High Court sitting in Port Harcourt in its judgment in a suit marked FHC/PH/CS/149/2020 held that the Rivers State Government had the powers to collect VAT and Personal Income Tax within its territory.

The FIRS, who had earlier appealed the judgement, applied for a stay execution on the judgment, however, the presiding judge, Justice Stephem Pam, rejected the application, saying granting it would negate the principle of equity.

The landmark judgement also implies that other state governments could follow and collect VAT in their jurisdictions.

Following the judgment, the FIRS had filed an appeal on the issue.