Blessing Iruoma, Port Harcourt
Governor Nyesom Wike of Rivers State has accused the Federal Government of emasculating states by usurping their constitutional rights and powers, revealed that the Federal Inland Revenue Service (FIRS) had surreptitiously written to the National Assembly to amend the Constitution and make collection of VAT exclusive to the Federal Government.
Commenting on the recent court judgement that it is the Rivers State Government and not Federal Inland Revenue Service (FIRS) that should collect Value Added Tax and other related taxes in the state, the governor said the state approached the court to seek an end to perceived infraction of its rights and powers.
“The Federal Inland Revenue wrote a letter to the National Assembly to amend the constitution to make VAT to be in the exclusive list.
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“So, we intercepted that letter and brought it to court because they know that under the law, it is not within their powers to collect these taxes.
“And in order to solve the problem, they wrote a letter to the National Assembly to amend the constitution to make them have the exclusive right. If they were right, they wouldn’t have done that.”
The governor revealed that he has already sent a bill to the Rivers State House of Assembly to empower the state government to collect VAT and other related taxes in the State.
It would be recalled that recently, a Federal High Court sitting in Port Harcourt declared that it is the Rivers State Government and not the Federal Inland Revenue Services (FIRS) that should collect Valued Added Tax (VAT) and Personal Income Tax (PIT) in the state.
The court, presided over by Justice Stephen Dalyop Pam, also issued an order of perpetual injunction restraining the Federal Inland Revenue Service and the Attorney General of the federation, both first and second defendants in the suit, from collecting, demanding, threatening and intimidating residents of Rivers State to pay to FIRS, personnel income tax and Value Added Tax.
Justice Pam made the assertion while delivering judgement in Suit No. FHC/PH/CS/149/2020, filed by the Attorney General for Rivers State (Plaintiff), against the Federal Inland Revenue Service (first Defendant) and the Attorney General of the Federation (second Defendant).
The Court, which granted all the eleven reliefs sought by the Rivers State Government, stated that there is no constitutional basis for the FIRS to demand for and collect VAT, Withholding Tax, Education Tax and Technology levy in Rivers State or any other State of the Federation, being that 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.
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The judge dismissed the preliminary objections filed by the defendants that the Court lacks jurisdiction to hear the suit and that the case should be transferred to Court of Appeal for interpretation.
Justice Pam, who also dismissed objection 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.
He declared that after a diligent review of the issues raised by both the Plaintiff and the Defendants, the plaintiff has proven beyond doubt that it is entitled to all the eleven reliefs it sought in the suit.
The court agreed with the Rivers State Government that it is the State and not FIRS that is constitutionally entitled to impose taxes enforceable or collectable in its territory of the nature of consumption or sales tax, VAT, education and other taxes or levies, other than 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.
Also, the court declared that the defendants are not constitutionally entitled to charge or impose levies, charges or rates (under any guise or by whatever name called) on the residents of Rivers State and indeed any state of the federation.
