Court Throws Out FIRS Stay of Execution Order on State VAT Collection

By Uche Mbah

Governor Nyesom Wike of Rivers state is dancing in the sun. A Federal High Court sitting in Port Harcourt has thrown out a suit by the Federal Inland Revenue Service, FIRS, which sought to stop the Rivers State Government from collecting and utilizing Value-Added Tax, VAT.

The taxman had approached the Federal High Court in Port Harcourt Court seeking a stay of execution on an earlier judgment which gave the power of VAT revenue collection to State governments, effectively taking it  away from the FIRS.

But the Presiding Judge, Stephen Pam, ruled Monday that granting the prayer will negate the Principle of Equity.

According to him, the Rivers State Government and the State Assembly enacted Rivers State Value Added Tax No. 4, 2021, thereby legitimizing state collection of VAT. Such a law must remain valid until it is set aside by a Court of competent jurisdiction.

He dismissed the plea, equating it to murder.

The Counsel for Rivers State Government, Mark Agu,  was full of commendation for the court. He said:

“The first Defendant, FIRS, sent their appeal against the judgment of the Honourable Court delivered wherein the Court allowed the Rivers State Government to collect their VAT”.

“Subsequently, after the judgment, Rivers State has its law on that, the Rivers State Law on VAT No. 4, 2021. Having appealed, they were asking for an injunction, and secondly asking for a stay on the judgment.

“Today, the Court has delivered its ruling dismissing the said application for stay, though, without cost.

“The Court reasons that if it should grant stay it is more or less like overruling itself and the court is empowered to recognize all laws enacted by the National Assembly or the State House of Assembly, therefore, the law stands as substantive.

“Therefore, the issues of collection of VAT as it stands today, Rivers State is still entitled to still collect.”

But, counsel for FIRS, Reuben Wanogho, reportedly expressed angst with the stand of the Court.

According to him, FIRS would appeal the ruling.

“The court has delivered its ruling based on how it saw the facts of the case. We do not agree with the ruling and we will take all necessary steps to challenge it. That is why the appellate System is there.

“The Appellate System is there to enable us to ventilate out grievances if for any reasons the Court makes a pronouncement we we do not agree with it.

“For sure, we feel that the ruling should have gone in our favor but, the Court has taken a position against us, so we will do the needful by taking it up immediately before the Court of Appeal.

“We will challenge it. And we are hopeful that at the Court of Appeal we should be able to find our way. The Appeal system is there to correct errors.

“The natural consequences of the ruling is that the Rivers State Government will be collecting the VAT, but we will take steps to ensure that we amelioration situation as quickly as possible.”