…FIRS insists it has VAT Act backing

Tayo AFOLABI

 

Rivers State Governor, Nyesom Wike, on Wednesday, has warned The Federal Inland Revenue Service,(FIRS) to stop bullying his state as the State hammer might fall on their offices.

Wike insisted on going on with his move to stop the Federal Government from collecting Value Added Tax from the oil-rich South-South state just as FIRS insists it has the backing of VAT Act.

Wike, who said he does not care if heaven falls, insisted that Rivers money is not meant for “Abuja people” but for the development of his state.

The governor spoke at a stakeholders’ meeting in Port Harcourt, the state capital, while addressing Shell Petroleum Development Company and other representatives of oil companies and business owners in the state.

It will be recalled that the Federal High Court sitting in Port Harcourt in its judgment in August in a suit marked FHC/PH/CS/149/2020 held that the Rivers State Government had the powers to collect VAT within its territory.

The Federal Inland Revenue Service, on Monday, however, prayed the court to stay execution on the judgment an application,which  the presiding judge, Justice Stephem Pam, rejected, saying granting it would negate the principle of equity.

Only on Monday, the Lagos State Government toed the path of Rivers State as a bill to empower it to collect VAT scaled second reading in the state House of Assembly.

VAT is a consumption tax paid when goods are purchased and services are rendered. It is charged at a rate of 7.5 per cent.

Speaking at the stakeholders’ meeting on Wednesday televised live on Channels TV and two other stations, Wike lamented about the injustice in the country saying Rivers generated N15bn in June 2021 but got N4.7bn while “Kano produced N2.8bn in June but Kano also got N2.8bn. Sometimes you don’t want to believe these things exist”.

The governor said he cannot continue to beg the Federal Government for what belongs to his state.

“People say that let heaven not fall but sometimes I believe that heaven should come down so that everybody will rest…When we do the right thing, heaven is at peace. So, the right thing must be done at all times,” he said.

‘I will shut FIRS offices in Rivers if bullying continues’

Wike added, “Rivers State is challenging FIRS from collecting VAT in Rivers State. I am not challenging FIRS from collecting VAT in Abuja. Let it be understood. But the law says Rivers must collect VAT in the state.”

“The Federal Government surreptitiously lobbied to amend the constitution to place VAT collection under the exclusive legislative list

“We have challenged it and we have no apologies to anybody.

“I don’t want to be in the good book of anybody but in the good book of God.

“You don’t bully a state like us. FIRS should be very careful. I have the political will to do a lot of things. If they continue to bully us, I will take all their offices in the state,” he stated.

The governor warned the oil companies and business owners not to remit their VAT to FIRS but the Rivers State Government.

“I don’t want you to fall prey of the people who think they can use force to take our money.

“If you want to take advantage and say you don’t know who to pay to, it is a lie, you know.

“From this September, we will start collecting our VAT.

“We will not look back but seal up the premises of such companies,” Wike warned, adding that the state does not need the Nigeria Police Force to enforce the collection of VAT but would use the state-created security outfit backed by the law.

Meanwhile, The Federal Inland Revenue Service (FIRS), Wednesday said it has the backing of the Value Added Tax (VAT) Act to collect the tax.

Rivers State government is currently locked in a legal battle with the tax agency over the collection of VAT.

FIRS Group Lead, Special Tax Operations Group, Mr. Matthew Gbonjubola and his Digital and Innovation counterpart,  Mrs. Chiaka Ben-Obi gave insight into the position of the organisation, in Abuja.

Mr. Gbonjubola explained that the bulk of VAT revenue comes from imports as well as, federal government Ministries Departments and Agencies (MDAs) contractors.

He said that in-country VAT revenue from the states was minimal.

According to him, no state government controls any port and that as such, it would be very difficult, if not impossible for sub-nationals to collect VAT.

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