By Nanji Nandang
A Federal High Court sitting in Port Harcourt, south-south, Nigeria, has granted the reliefs sought by Rivers State Government to restrain the Federal Inland Revenue Services (FIRS) from collecting Valued Added Tax (VAT) and Personal Income Tax (PIT) in Rivers State.
The judgment delivered by Justice Stephen Dalyop Pam, on Monday, in suit No. FHC/PH/CS/149/2020, filed by the Attorney General of Rivers state, who is the plaintiff, against the (FIRS), the first defendant and the Attorney General of the Federation, the second defendant, issued an order of perpetual injunction restraining the (FIRS) and the Attorney General of the federation, from collecting, demanding, threatening and intimidating residents of Rivers state to pay personnel income tax and Value Added Tax to FIRS.
The court, granted all the eleven reliefs sought by the Rivers state government, noting that there is no constitutional basis for the FIRS to demand and collect VAT, Withholding Tax, Education Tax and Technology levy in Rivers state or any other State of the Federation, except for the taxes and duties specifically reserved for the Federal Government by items 58 and 59 of Part 1 of the second schedule of the 1999 constitution as amended.
“The constitutional powers and competence of the federal government is limited to taxation of incomes, profits and capital gains which does 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,” he said.
Justice Pam, who also dismissed objections raised by the defendants that the National Assembly ought to have been made a party in the suit, declared that the issues of taxes raised by the State government are issues of law that the court is constitutionally empowered to entertain.
In the same vein, the lead counsel for the Rivers State Government, Donald Chika Denwigwe (SAN), who spoke to journalists after the court session, explained that the aim of the case is to interpret the authority of the state and Federal government levels to collect VAT in the constitution.
He said “So, during the determination of the matter, some issues of law were thrown up like, whether or not the case should be referred to the Court of Appeal for the determination of some issues.
According to Denwigwe, the court dismissed the application filed by the defendant to transfer the case to the court of Appeal, noting that the case was in its proper place before the Federal High Court.
