Federal Inland Revenue Service, FIRS: Insists on collection of VAT

By Mustapha Sumaila

The Federal Inland Revenue Service (FIRS) has urged tax payers to continue to pay their Value Added Taxes into its coffers despite a court ruling giving states to collect the payment.

A Federal High Court sitting in Port Harcourt, Rivers, had on Aug. 9 ruled that the Rivers State Government not the FIRS, was the rightful authority to collect VAT.

The FIRS had immediately appealed the Federal High Court judgment which gave Rivers state the right to collect VAT.

It also asked the court to stay the execution of the judgment. But in a ruling on Monday, the court rejected the application for stay of the execution of the judgment.

Following the ruling, the Rivers State Government indicated that it will begin to collect VAT.

In reaction, the FIRS  Wojuola said the court stated clearly that until the Court of Appeal, or even the Supreme Court, determines the matter, tax payers were required to continue to comply with their VAT obligations within the status quo framework.

But the FIRS urged taxpayers not to panic over the court ruling in a statement by the Special Assistant to the Chairman of the FIRS on Media and Communications, Johannes Wojuola, in Abuja on Monday.

Wojuola said the court stated clearly that until the Court of Appeal, or even the Supreme Court, determines the matter, tax payers were required to continue to comply with their VAT obligations within the status quo framework.

“The FIRS having lodged, in the Court of Appeal, both an appeal against the decision of the Federal High Court sitting in Rivers State in Suit No. FHC/PH/CS/149/2020, Attorney General of Rivers State Vs Federal Inland Revenue Service.

“And there is an injunction pending appeal of the said judgement, therefore we assure taxpayers that there is no cause for alarm.

“The Federal High Court ruling should not breed any confusion as to the obligations of taxpayers. Taxpayers must continue to comply with the Value Added Tax Act pending the final determination of appeal.

“Taxpayers must continue to honour their tax obligations under the VAT Act. Failure to do this would put them on collision course with the law,” he said.

The special assistant noted that for the avoidance of doubt, records of appeal had been transmitted to the appellate court.

According to him, the Service is confident that, given the extant laws, the arguments and case put forward, it will earn a favoured judgment at the appellate court.