Collection of value added tax by federal government illegal – Court

Collection of value added tax by federal government illegal - Court

The collection of Value Added Tax (VAT) and Personal Income Tax by the federal government of Nigeria, has been declared illegal and unconstitutional by a Federal High Court sitting in Port Harcourt, Rivers State.

Stephen Pam, the presiding judge ruled that the Nigerian government’s constitutional powers did not include VAT collection but those items in 58 and 59 of the Exclusive Legislative List.

The judge who gave judgement in favour of Rivers State as the rightful arm to receive personal income tax and VAT originating from the state, issued an order of perpetual injunction limiting FIRS and the Attorney General of the federation from forcing residents of the state to pay VAT and personal income tax to the Federal Inland Revenue Service (FIRS).

According to the court, the FIRS is not entitled to receiving VAT, education tax, technology levy and withholding tax from any state in Nigeria and further dismissed the objections the defendant filed that hearing the case was not within the court’s jurisdiction.

The defendant’s plea for the case to be transferred to the Court of Appeal for interpretation, was dismissed by the judge.

The suit was between the Attorney-General for Rivers State and Federal Inland Revenue Service (FIRS) as the first defendant and the Attorney General of the federation, Abubakar Malami, as the second defendant.

Author: Greg