A Federal High Court sitting in Port Harcourt, Rivers State on Monday dismissed an application by the Federal Inland Revenue Service (FIRS), seeking to halt collection of Value Added Tax (VAT) revenue by the Rivers state government.
The FIRS in a suit no FHC/PH/CS/149/2020 prayed the Court for an order of stay of execution on its earlier ruling granting Rivers State the powers to collect VAT revenue, saying that the FIRS is not constitutionally empowered to collect VAT on behalf of the states.
The trial judge specifically ruled that it was the constitutional role of State governments to collect VAT and not FIRS.
Delivering his judgement on Monday, Justice Stephen Dalyop Pam said it would be against the principle of equity to deny State governments from collecting VAT.
The judge ruled that State laws as enacted with regards to VAT should be obeyed, saying that the only exception was when the particular law has been set aside by the Court of competent jurisdiction.
While dismissing the prayers sought by FIRS, Justice Pam said it would not stand the test of time is FIRS is allowed to collect VAT on behalf of states.
In his remarks after the Court ruling, Counsel to the Rivers State government, Mark Agu Esq, commended the Court for standing for truth, saying the state VAT law has already been enacted.
Agu said that the FIRS had approached the Court with two prayers but later withdrew the first seeking for an injunction and wanted the Court to stay execution of its judgement, adding that the FIRS had already filed an appeal against the judgement of the Federal High Court which granted Rivers State Government the power to collect VAT revenue.
According to Agu; “Subsequently, after the judgement, Rivers State has its own law on that which is the Rivers State Law on VAT No. 4, 2021.
“Having filed an appeal, they are asking for an injunction and secondly asking for stay on the judgement.
“Today, the Court delivered its ruling dismissing the said application for stay, though without cost,” he enthused.
