Tax War: Despite Losing in Court, Nigeria’s Inland Revenue Service Insists on Collecting VAT

The Federal Inland Revenue Service (FIRS) has directed taxpayers they must continue to comply with their Value Added Tax (VAT) obligations until the court of appeal, or the supreme court determines the matter.

The federal agency also asked taxpayers not to panic over the recent court ruling by a Port Harcourt division of the federal high court.

The court had on Monday, dismissed FIRS’ motion for stay of execution of the earlier judgment directing Rivers state to take charge of VAT collection.

In its reaction on Monday, the agency said “until the court of appeal, or even the supreme court, determines the matter, taxpayers are required to continue to comply with their Value Added Tax (VAT) obligations within the status quo framework.”

“The FIRS having lodged, in the Court of Appeal, both an appeal against the decision of the Federal High Court sitting in Rivers State in Suit No. FHC/PH/CS/149/2020, Attorney General of Rivers State Vs Federal Inland Revenue Service, and an injunction pending appeal of the said judgement assures taxpayers that there was no cause for alarm,” a statement signed by Johannes Wojuola, special assistant on media and communication to the chairman of FIRS read:

“The Federal High Court ruling should not breed any confusion as to the obligations of taxpayers. Taxpayers must continue to comply with the Value Added Tax Act pending the final determination of the appeal.

“Taxpayers must continue to honour their tax obligations under the VAT Act. Failure to do this would put them on a collision course with the law.

“For the avoidance of doubt, records of appeal have been transmitted to the appellate court. The Service is confident that, given the extant laws, the arguments and case put forward, it will earn a favoured judgment at the appellate court.”

ARISE News had reported Monday that Nyesom Wike, Rivers state governor, had directed the state’s Internal Revenue Service (RIRS) to fully implement and enforce the collection of value-added tax (VAT).

By Abel Ejikeme

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