A landmark judgement that may shake the financial structure of Nigeria has been given in Rivers State.
The Federal High Court sitting in Port Harcourt, the state capital, has declared that the Rivers Government, not the Federal Inland Revenue Services (FIRS) should collect the Valued Added Tax (VAT) and Personal Income Tax (PIT) in the State.
Rivers is one of the states where fat VATS are collected, with Lagos being the juiciest zone for them.
Analysts thus believe the latter too and others will want the judicial leverage take root in their areas.
According to ‘The Nation’, the court presided over by Justice Stephen Dalyop Pam also issued an order of perpetual injunction restraining the Federal Inland Revenue Service 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.
Justice Pam made the declaration while delivering judgement in suit No. FHC/PH/CS/149/2020, filed by the Attorney-General for Rivers State (plaintiff), against the FIRS (first defendant) and the Attorney-General of the Federation (second defendant).
The court, which granted all the eleven reliefs sought by the Rivers State Government, stated that there was no constitutional basis for the FIRS to demand for and collect VAT, Withholding Tax, Education Tax and Technology levy in Rivers State or any other state of the Federation
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Pam said the constitutional powers and competence of the Federal Government was limited to taxation of incomes, profits and capital gains, which did not include VAT or any other species of sales, or levy other than those specifically mentioned in items 58 and 59 of the Exclusive Legislative List of the Constitution.
The judge dismissed the preliminary objections filed by the defendants that the court lacked the jurisdiction to hear the suit and that the case should be transferred to Court of Appeal for interpretation.
