Rivers, Lagos move to stop FIRS from sharing VAT revenue


Mr Muhammad Nami, Executive Chairman, Federal Inland Revenue Service (FIRS)

Rivers and Lagos States on Thursday urged the Court of Appeal in Abuja to restrain the Federal Inland Revenue Service (FIRS) from further collecting and distributing proceeds from Value Added Tax (VAT).

The two states want FIRS stopped pending the determination of an appeal by the tax agency.

FIRS has appealed the 9 August 2021 judgment by Justice Steven Pam of the Federal High Court in Port-Harcourt, voiding the Value Added Tax (VAT) Act and holding that states could collect VAT.

Lawyer to Rivers, Ifedayo Adedipe (SAN), applied orally to the court to exercise its powers under Order 4 Rules 6 of the court’s Rules to appoint either a receiver or manager to take custody of the res (subject of dispute) pending the determination of the appeal.

Lawyer to Lagos and the Attorney General, Moyosore Onigbanjo (SAN) noted that it was necessary that the court balances the equity as it relates to its earlier order, directing parties to maintain status quo ante bellum.

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“I think it is also necessary to restrain the FIRS, because they collect the VAT, distribute to all the states and keep their own 4 per cent.

“If, at the end of the day, the court agrees with the judgment of the Federal High Court, how do we retrieve the funds that have been shared?”

Justice Haruna Simon Tsanami, who led a three-member panel, directed them to make the application formal by providing the necessary facts, including ascertaining the amount being collected as VAT.

Other members of the panel are Justices Bature Gafai and Peter Affen.