Rivers State Governor, Nyesom wike has directed Rivers State Revenue Service to start the collection of Value Added Tax after the Federal High Court sitting in Port Harcourt dismissed a case filed by the Federal Inland Revenue Service, asking to stop the Rivers State Government to start collecting VAT.
The FIRS in suit no FHC/PHC/149/2021 approached the court asking a stay of execution on the earlier judgment of the court that stopped FIRS from collecting VAT.
After the court judgment against it, FIRS asked the high court to stop the Rivers State Government from executing the judgment.
Justice Stephen Pam of the Federal High Court, in his ruling on Monday said granting the application would abate the principle of equity.
Justice Pam said that the Rivers State Government and the State Assembly had enacted Rivers State Value Added Tax No.4,2021, which made it a legitimate right of the state to collect VAT.
Judge revealed that the law remained valid until it had been set aside by a court of competent jurisdiction, adding that the law enacted by the state legislature remained valid.
Pam said that granting the prayers of FIRS would amount to committing murder,noting that the prayers can not stand and dismissed same.
While speaking outside the court room, counsel to the Rivers State Government, Mark Agu, said
“The court’s reasoning is that if it should grant the stay, it is more or less like overruling itself and the court is empowered to recognise all laws enacted by the national assembly or the state house of assembly, therefore the law stands as substantive.
“Therefore, the issue of collection of VAT as it stands today is that Rivers State is still entitled to still collect.”
Counsel to FIRS, Reuben Wanogho, expressed dissatisfaction with the stand of the court.
Also, Lagos State House of Assembly on Monday on the floor of the house read for the first and second time, the state’s Value Added Tax (VAT) bill, and asked the Committee on Finance, which was handling it to report back on Thursday.
The Speaker of the House, Mudashiru Obasa said it would further lead to an increase in revenue and infrastructural development.
“This is in line with fiscal federalism that we have been talking about,” he said.
Obasa said the VAT law, when passed, would help the state meet challenges in its various sectors.
He also urged the Lagos State government to do everything legally possible, to ensure the judgment of the Federal High Court, Port Harcourt, was sustained even up to the Supreme Court.
The speaker lamented a situation where about N500 billion would be generated from the state, while N300 billion was generated from other South-west states, but paltry amounts would be disbursed to Lagos State in return.