VAT War: Appeal Court Stops Lagos, Rivers

The Court of Appeal, Abuja Division has ordered the government of Rivers and Lagos states to refrain from any action giving effect to the August 9, 2021 judgment of Rivers State High Court, which conferred powers on Rivers State to collect Value Added Tax (VAT) and Personal Income Tax.

 GreenWhiteGreen GWG reports that the development from the Court of Appeal came shortly after Governor Babajide Sanwo-Olu of Lagos signed the VAT Bill as passed by the Lagos State House of Assembly that would have allowed the State to commence the immediate collection of VAT within the State.

Lagos contributes to about half of the total VAT collections in the country.

Delivering the ruling on an appeal by the Federal Inland Revenue Service (FIRS) seeking a stay of execution of the judgment and injunction, the panel of Justices of the appellate court urged parties in the suit to hold on in the execution of the judgement pending the determination of a motion by Lagos State to join as an interested party.

It would be recalled that a Federal High Court sitting in Port Harcourt had, last week restrained the FIRS from collecting some taxes from Rivers residents.

The court declared that Rivers Government, not the FIRS should collect the VAT and Personal Income Tax (PIT) in the State.

The court presided over by Justice Stephen Dalyop Pam, issued an order of perpetual injunction restraining the FIRS and the Attorney-General of the Federation, both first and second defendants in the suit, from collecting, demanding, threatening, and intimidating residents of Rivers State to pay to FIRS, personnel income tax, and VAT.

The court declaration is bound to unsettle permutations by the authorities in Rivers and Lagos who had set machinery to commence the collection of the VAT proceeds from September.

Source: Nigerian Tribune

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