VAT War: Wike, FIRS In Fiery Exchange As Agency Seeks Exclusive Powers From NASS…

VAT War: Wike, FIRS In Fiery Exchange As Agency Seeks More Powers
  • ‘Let Heaven Fall..VAT Not For Abuja People’ — Governor Vows
  • Amend Constitution To Establish Revenue Court, FIRS Tells NASS In Reaction

The brouhaha between Governor Nyesom Wike of Rivers State and the Federal Inland Revenue Service (FIRS) over the collection of the Value Added Tax (VAT) reached a new high on Wednesday as the agency wrote the National Assembly, seeking exclusive powers over the collection of VAT tax in the country.

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.

According to the governor, the VAT belongs to Rivers, adding that it is not meant for FIRS or “Abuja people”.

This is coming in the wake of the court ruling of a Federal High Court in Port Harcourt, Abuja.

Justice Stephem Pam of the Federal High Court, last month had ruled granting an order, restraining FIRS from collecting VAT in Rivers state on the grounds that only the Rivers State Government has the exclusive powers to collect VAT within its territory.

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The FIRS had since filed another application at the Appeal Court seeking the dismissal of the ruling of the High Court.

However, Wike, who addressed a stakeholders’ meeting of the Shell Petroleum Development Company (SPDC) and other oil companies, insisted that the state government will commence the collection of VAT in September.

Wike said even if heaven falls, he would still go ahead to ensure that the FIRS does not collect VAT in the state.

Wike lamented that the Federal Government is allegedly trying to amend the constitution to ensure that only FIRS is given the exclusive right to collect VAT.

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The governor also warned the oil companies and business owners against remitting their VAT to FIRS.

In his words, “Kano produced N2.8bn in June but Kano also got N2.8bn. Sometimes you don’t want to believe these things exist.

“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.

“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.

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“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 added.

Meanwhile, the FIRS has reportedly written a letter to the National Assembly seeking the amendment of the 1999 constitution to include the collection of VAT under the legislative list.

The FIRS, in the letter is seeking the establishment of the Federal Revenue Court of Nigeria, which will have exclusive power to hear and determine cases relating to tax matters.

This was contained in a letter signed by the Executive Chairman of the FIRS, Muhammad Nami and addressed to the Deputy Speaker of the House of Representatives, Hon Idris Wase, who also double as the Chairman of the Constitution Review.

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The letter partly reads, “The Federal Inland Revenue Service further proposes for the amendment of Section 251 (1) (b) of the Constitution of the FRN 1999 (amended) by removing the exclusive jurisdiction of the Federal High Court only on anything connected or related to federal tax matters since same would be vested on the proposed federal revenue court.

“The Federal Inland Revenue Service also proposes for the insertion of value added tax immediately after Stamp Duties under item 58 part II of 2nd schedule of the 1999 Constitution of the FRN.

“The Federal Inland Revenue Service appreciates the maximum cooperation and support we are receiving from your good office on tax matters generally.

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“This has boosted our morale and determination to do more for the government in tax revenue generation.

“The FIRS therefore wishes to further request that the House of Representatives consider the request for the establishment of the Federal Revenue Court.”

The FIRS in the letter, claims Item 59 of the Exclusive Legislative List Part 1, 2nd Schedule to the Constitution of the FRN 1999 as amended vests the powers to make laws on anything related to tax matters in Nigeria, on the National Assembly.

“Historically, the Federal Revenue Court was established by the promulgation of the Federal Revenue Court Decree No.13 1973.

“However, the enactment of Section 228(1) and 230(1) of the 1979 Constitution of FRN, renamed the Revenue Court to Federal High Court.

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“This was further replicated by the Federal High Court Decree (amendment) 1991Cap (60l LFN, now referred to as the Federal High Court (amendment) Act 2005 Cap F12 LFN revised edition 2010

“This amended Section 7 of the Federal High Court Act (1991), conferred exclusive jurisdiction on the Federal High Court in relation to tax matters amongst others.

“Section 228(1) and 230(1) was further re-enacted as Section 251(1) (a) to (s), of the Constitution of FRN 1999.

“The FIRS hereby proposes for the insertion of Section 254(G) to 254 (L) in the 1999 Constitution of the FRN to provide for the establishment of Federal Revenue Court, the appointment of Chief Judge, power to make rules for the proceedings, the appointment of judges of FRC and the exclusive jurisdiction of FRC on federal tax matters.”

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