FIRS Appeals Court Judgment Against VAT Collection

The Federal Inland Revenue Service (FIRS) has appealed a recent judgment of the Federal High Court in Port Harcourt Rivers State on the issue of Value Added Tax (VAT)collection.

The FIRS disclosed this in a statement released on Sunday by its Director, Communications and Liaison Department, Abdullahi Ismaila Ahmad.

A Federal High Court siting in Port Harcourt had ruled that Value Added Tax and Personal Income Tax collected in the state should go to the state purse.

Prior to the judgement, the VAT and PIT are collected by the Federal Inland Revenue Service.

The Federal Government charges 7.5 per cent as VAT on goods.

The judgement which was passed by Justice Stephen Dalyop Pam also issued an order of perpetual injunction stopping the FIRS and the Attorney-General of the Federation from collecting and demanding VAT and PIT from residents of the state according to the Nations.

In the suit, the FIRS was the first defendant, while the Attorney-General of the Federation is the second defendants.

According to the verdict, the constitutional powers and competence of the Federal Government was limited to taxation of incomes, profits and capital gains including VAT.

It also include species of sales, or levy except those specifically mentioned in items 58 and 59 of the Exclusive Legislative List.

But reacting to the judgement, the FIRS stated that it had sought an injunction pending appeal and a Stay of Execution of the said judgment.

The statement reads, “This is to inform the general public that the Federal Inland Revenue Service has lodged an appeal against the judgment of the Federal High Court Port Harcourt Judicial Division delivered by Honourable Justice Stephen Pam, in SUIT NO. FHC/PH/CS/149/2020-ATTORNEY GENERAL OF RIVERS STATE v. FEDERAL INLAND REVENUE SERVICE & ANOTHER.

“We have also sought an injunction pending appeal and a Stay of Execution of the said judgment.

“As the decision is being appealed and in view of the pending applications for injunction and stay of execution which the FIRS has filed in court against the judgement, members of the public are advised to continue complying with the Value Added Tax obligations until the matter is resolved by the appellate courts in order to avoid accruing the consequent penalties and interest for non-compliance.”