Nigeria’s human rights lawyer, Mr Mike Ozekhome (SAN) has stated that the ruling of the Court of Appeal sitting in Abuja on Friday means that the Rivers State Government has the power to collect Value Added Tax (VAT) until the court decides otherwise.
He made this clarification in a statement titled, ‘FIRS & Rivers State Government: Who Should Now Collect VAT?’
A Federal High Court sitting in Port Harcourt had in a judgment in suit number FHC/PH/CS/149/2020, held that the Rivers State Government had the powers to collect VAT within its territory.
Rivers State Governor, Nyesom Wike had assented to the Rivers State Value Added Tax Law 2021 in August after it was passed by the state House of Assembly.
Some states have since followed with the Lagos State Governor, Babajide Sanwo-Olu signing the State VAT Bill into law a day after it was passed by the Lagos State House of Assembly.
Lagos had also asked to be joined as a respondent alongside Rivers State in the appeal filed by the Federal Inland Revenue Service (FIRS) challenging the judgment of the Federal High Court, Port Harcourt regarding the issue of VAT collection.
Justice Haruna Tsammani of the Appeal Court had adjourned to September 16 to hear the application by Lagos and asked all parties to “maintain status quo”.
But in his interpretation of “maintain status quo” as reportedly said by Justice Tsammani, Ozekhome argued that: “Clearly, the status quo ante bellum was before the breakout of the hostilities.
“The hostilities broke out when the FIRS dragged the Rivers State Government to court, arguing that it cannot collect VAT based on its law. The said law was already duly passed and made operational by Rivers State House of Assembly that it has the constitutional competency under section 4 of the Constitution to do so.
“The FHC, Port Harcourt, Rivers State, had earlier held that it was the Rivers State Government that was competent to collect VAT, not the FIRS.
“The law was already therefore in operation before the FIRS challenged the validity of an FHC judgement, PH, that had given the Rivers State Government the power to collect the VAT.
“So, the status quo is that it is the Rivers State Government that has the power to collect VAT, until perhaps, the Court of Appeal rules otherwise and set aside the FHC judgment.”
The senior advocate, however, urged the parties to “avoid unnecessary bickering and needless head-on collision” in the matter that is “already subjudice” and “cease hostilities” by “maintaining the status quo until the Court of Appeal finally pronounces on the matter.”
