The Federal Inland Revenue Service (FIRS) has directed taxpayers in the country to continue to pay their Value Added Tax (VAT) to it or risk penalties for failing to do so.
The FIRS said it decided to issue the directive following numerous enquiries in view of a recent court ruling obtained by Rivers State at a Federal High Court, Port Harcourt, that states, and not the federal government, are constitutionally empowered to collect VAT.
The FIRS, in a statement titled, “Rivers Judgment: FIRS Urges Taxpayers to Continue to Pay VAT,” argued that since it had already appealed the Rivers judgment seeking a stay of execution order, the status quo ante subsists on the VAT collection authority, hence taxpayers should continue to pay their VAT to it.
The statement issued by the Director, Communications and Liaison Department, FIRS, Abdullahi Ismaila Ahmad said the attention of the Service had been drawn to the trending report that on August 19, 2021, the Rivers State government took steps to enact a VAT Law for the state following the Judgment of the Federal High Court Port Harcourt Division on August 9, 2021 in Suit No: CS/149/2020.
It added: “The suit was about who has the constitutional duty for the collection of VAT and Personal income tax in Rivers State.
“We wish to inform the general public that, before the above-mentioned steps taken by the Government of Rivers State, the FIRS had lodged an appeal against the above judgment and had also filed an application for stay of execution on the judgment as well asking the Court for an injunction pending determination of the appeal.
“All parties to the suit are aware that both applications were heard on the 19th and 20th August 2021, and are awaiting the decision of the Court.
“Given that the Court of Appeal is yet to rule on the Appeal from the judgement of Federal High Court and that the Federal High Court is yet to deliver a ruling on FIRS’s applications for stay of execution and injunction, members of the public are advised to continue to comply with their Value Added Tax obligations until the matter is resolved by the appellate courts,” the FIRS said.
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