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By Omodele Adigun
As the Federal Inland Revenue Service (FIRS) vowed to continue collecting Value Added Tax (VAT) across the country pending the determination of its appeal against the court judgement that bars it from doing so, the Chartered Institute of Taxation of Nigeria (CITN) said the analysis of the Certified True Copy (CTC) of the judgement and advice from its legal team would determine its stand on the issue.
“When that is done in the next few weeks, the Institute will take an informed position and the public will be duly communicated”, says its Rgistrar/CEO, Adefisayo Awogbade, in a statement made available to Daily Sun. “We are mindful of our statutory mandate as a tax regulatory professional Institute and we will not shirk our responsibility to the public in all matters relating to taxation in Nigeria,” the statement adds.
In a judgment delivered by Justice Stephen Pam of the Federal High Court, Port Harcourt Division, Rivers State, recently, it was held that the Rivers State government, and not the Federal Government, is empowered to collect Value Added Tax (VAT) and Personal Income Tax (PIT) in the state.
The court held that there was no constitutional provision backing the collection of VAT, Withholding Tax, Education Tax and Technology Levy in Rivers State or any other state of the federation by FIRS, owing to the fact that the Federal Government is restricted by the Constitution of the Federal Republic of Nigeria, 1999 to taxation of incomes, profits and capital gains and these do not in any way include VAT or any other levy other than those specifically mentioned in Items 58 and 59 of the Exclusive Legislative List of the Constitution.
Citing previous decisions nullifying VAT Act or parts of it, Registered Trustees of Hotel Owners and Managers Association of Lagos v. A. G. Federation Others In October 2019 and Emmanuel Chukwuka Ukala v. FIRS & A.G. FEDERATION in Suit No.FHC/PH/CS/30/2020, the tax body noted:
“While the Institute is in possession of the first and second cases mentioned, we are making efforts to get a Certified True Copy of the third and current case. From the foregoing decisions, it is evident that this is not the first time that the VAT Act has been declared unconstitutional.
“As an Institute, we were waiting for the appellate courts to take a definite position on the matter before making our comments. In view of the length of time that it takes for an appeal to be determined in our country, we think it will be in the public interest not to wait any longer. As soon as we receive the certified true copy of the judgement, our legal advisers will study it and advise us accordingly.”
