NIGERIA’S ongoing value added tax (Vat) debate took a further twist today after Nigeria’s Court of Appeal decided to keep the Federal Inland Revenue Services (Firs) as the recipient of all monies pending the determination of all legal issues on the matter.
Over the last month, Nigeria has been caught up in a complex debate about Vat after a high court issued an order restraining Firs from collecting Vat and personal income tax in Rivers State in July this year. In its judgement, the court directed the Rivers State government to take charge of the collection of both taxes.
Following the court’s judgement, Governor Nyesom Wike of Rivers State signed the VAT Law No. 4 of 2021 on August 19 and instructed local revenue officials top begin collecting the tax. Following suit, the Lagos State House of Assembly also passed a Vat Bill, which Governor Babajide Sanwoolu signed into law last week.
Today, however, the two states suffered a setback as Nigeria’s Court of Appeal in Abuja declined their request to ban Firs and the federal government from playing any role in Vat collection nationally. In the suit, Ifedayo Adedipe, the counsel to the Rivers State government pleaded with the court to exercise its power to appoint a receiver or manager to take custody of Vat in the interest of justice to parties in the matter.
Moyosore Onigbanjo, the Lagos State attorney general supported the pleas asking that the Appeal Court restrain Firs from further collecting the tax and replace it with a receiver or manager that would act for parties involved in the case. She predicated her argument on the fact that Firs has continued collecting and sharing Vat among Nigeria’s 36 states and the Federal Capital Territory despite the pendency of the legal tussle.
However, the presiding judge, Justice Hamma Tsanami asked the two states to make their request formal by making it in writing. After listening to the arguments of both attorneys, the court said that a date to rule on the issues would be communicated to them soon.