Again, FIRS losses to Rivers in VAT collection war

PORT HARCOURT, Rivers, Nigeria – The Federal Inland Revenue Service, FIRS, for the second time lost in its bid to continue to collect Value Added Tax in Rivers State. 

The FIRS had filed a Stay of Execution to stop the Rivers Government from enforcing earlier judgment that vested powers of collecting VAT exclusively in the Rivers State Government and not FIRS.

Ruling on the FIRS application, Justice Stephen Pam noted that granting Stay of Execution would negate the principle of equity, noting that the Rivers State Government through the state assembly, has duly enacted Rivers State Value Added Tax No. 4, 2021, which makes it a legitimate right of the state to collect VAT.

Justice Pam added that every court in the country is constitutionally mandated to obey every legislation enacted by both the national and state assemblies.

According to him, the Rivers State government law on VAT remains valid until it has been set aside by a court of competent jurisdiction. He added that since FIRS was, ab initio, acting in error by collecting VAT in Rivers State,  and therefore has a moral burden to refund  those monies  the court would  need not allow FIRS to incur further liability.

He declared: “FIRS application is refused and dismissed in the light of the fact that all subsisting law concerning the collection of VAT stands in favour of the Rivers State government”, he ruled.