The River State Governor, Nyesom Wike has ordered the Rivers State Revenue Service to commence the collection of Value Added Tax after a Federal High Court sitting in Port Harcourt dismisses a suit by the Federal Inland Revenue Service, seeking to stop the Rivers State Government from commencing the collection of VAT.
The FIRS in suit no FHC/PHC/149/2021 had approached the court seeking a stay of execution on the earlier judgement of the court that stopped FIRS from collecting VAT as it was constitutionally the role of state governments.
Following the judgement against it, the FIRS had sought the high court to stop the Rivers State Government from executing the judgement.
But Justice Stephen Pam of the Federal High Court, in his ruling on Monday said granting the application would negate the principle of equity.
Justice Pam noted that the Rivers State Government and the State Assembly had duly enacted Rivers State Value Added Tax No. 4, 2021, which made it a legitimate right of the state to collect VAT.
The judge said 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 explained that granting the prayers of FIRS would amount to committing murder, noting that the prayers cannot stand and dismissed same.
Speaking outside the court room, counsel for 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 recognize 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.”
But counsel for FIRS, Reuben Wanogho, expressed dissatisfaction with the stand of the court.
Wanogho said, “We will challenge it. And we are hopeful that at the Court of Appeal, we should be able to find our way. The appeal system is there to correct errors.”
However, Wike in a state broadcast said, “Today, the FIRS has failed in its attempt to frustrate the enforcement of the State’s Law on VAT with the Federal High Court’s dismissal of its application for stay-of-execution of the judgement.
“It is important to reiterate the fact that we did no wrong in exercising our legal right under our constitutional democracy to stop the continuing breach, denial and curtailment of the constitutional rights of states to lawfully impose and collect value added and other related taxes within jurisdiction to the exclusion of the Federal Government.”
Wike further said, “All that is required is for all of us to wear our thinking caps as elected governors to collectively fight for the greater devolution of resources, responsibilities and powers to the federating states.
“It is therefore very unfortunate that some state governors led by that of Katsina State are vainly conspiring to truncate this progressive reality in favour of the inequitable status quo so that the Federal Government can continue to rob Peter to pay Paul as the nation’s self-imposed tax master-general.”
He directed the state revenue service to implement this law.
“I hereby direct the Rivers State Revenue Service to ensure the full and total implementation and enforcement of this law against all corporate bodies, business entities and individuals with immediate effect.
“All corporate bodies, business entities and individuals are advised to willingly, truthfully and promptly comply with their tax obligations under this law to avoid the full weight of the stipulated sanctions, including having their business premises sealed up,” he added.