Personal Taxes

Courtroom prohibits the Nigerian authorities from gathering VAT, personal tax in rivers and different states

Aug 09 (THEWILL) – A federal high court in Port Harcourt prevented the federal government from collecting some taxes from residents of Rivers.

The court stated that the Rivers government, not the Federal Inland Revenue Services (FIRS), should collect sales tax (VAT) and income tax (PIT) in the state.

The court, chaired by Judge Stephen Dalyop Pam, issued an injunction preventing the Federal Treasury and the Attorney General, both the first and second defendants in the lawsuit, from rallying, demanding, threatening, and intimidating residents of the Rivers State Paying to FIRS, personnel income tax and VAT.

Judge Pam made the statement while delivering the verdict in Case No. FHC / PH / CS / 149/2020 filed by the Rivers State Attorney General (Plaintiff) against FIRS (First Defendant) and the Federation Attorney General (Second defendant).

The court, which granted all eleven relief requests requested by the Rivers state government, found that there was no constitutional basis for FIRS to collect and collect sales tax, withholding tax, education tax, and technology levy in the state of Rivers or any other federal state .

Pam said the federal government’s constitutional powers and responsibilities are limited to the taxation of income, profits and capital gains that do not include sales tax or any other types of sales or charges other than those referred to in Articles 58 and 59 of the Constitution’s Exclusivity Legislative List.

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The judge rejected the defendants’ preliminary objections that the court did not have jurisdiction to hear the lawsuit and that the case should be referred to the appellate court for interpretation.

Judge Pam, who also dismissed defendants’ objections that the National Assembly should have been a party to the lawsuit, stated that the tax issues raised by the state government were legal issues that the court had constitutional powers.

He stated that after carefully examining the issues raised by the plaintiff and defendants, the plaintiff had demonstrated beyond any doubt that it was entitled to all eleven remedies that it sought in the lawsuit.

The court agreed with the Rivers State government that the state, and not FIRS, is constitutionally entitled to collect enforceable or recoverable taxes in its territory in the form of excise or sales taxes, sales taxes, education taxes, and other taxes or duties, except taxes and duties, which are expressly reserved for the Federal Government in points 58 and 59 of the first part of the second annex to the 1999 constitution, as amended.

Donald Chika Denwigwe, SAN, (center) senior attorney for the Rivers state government and Ken CO Njemanze, SAN (left) inform journalists after the Federal Court of Justice in Port Harcourt ruled that FIRS ‘VAT collection in Rivers state was unconstitutional on Monday.

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