Collection of Value Added Tax by FIRS Remains, Says Malami

Collection of Value Added Tax by FIRS Remains, Says Malami

  • The federal government says its agency, Federal Inland Revenue Service, will continue to collect Value Added Tax after a recent court row
  • The chief law officer of the country, Abubakar Malami, SAN made the clarification after different interpretations of a recent court judgement
  • Malami's declaration is, however, at variance with the one made by Rivers state government, Nyesom Wike

New York - The federal government says the Federal Inland Revenue Service (FIRS) will continue to collect Value Added Tax (VAT) following the ruling of the Court of Appeal on the matter.

The Attorney-General of the Federation (AGF) and Minister of Justice, Abubakar Malami, made the comment while speaking to journalists in New York on the disagreement over the collection of VAT between FIRS and Rivers state government.

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AGF Malami says the collection of Value Added Tax by FIRS will continue. Photo credit: Ministry of Justice
Source: Facebook

The News Agency of Nigeria quoted him as saying:

“The position of not only the federal government but indeed the judiciary is the fact that status quo associated with the collecting of VAT should be maintained.”

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Vanguard newspaper reports that the Northern Elders Forum, NEF, described the raging VAT controversy in the country as a wake-up call for northern governors.

NEF spokesman, Hakeem Baba-Ahmed, said time was ripe for governors in the north to depend less on revenue from VAT.

How does VAT work in Nigeria?

Under Nigerian law, the tax is charged at 7.5% of the value of the taxable goods and services. An illustration of this is if you sell shoes for N10, 000, the VAT chargeable on that is 7.5% of the value – N750, the business is therefore supposed to sell the shoes to members of the public for N10, 750.

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Wike threatens showdown with FIRS

Governor Nyesom Wike of Rivers had earlier threatened to “take over” all offices of the FIRS in his domain if the federal government agency continues with its “bullying.”

The governor spoke at a stakeholders’ meeting in Port Harcourt, the state capital while addressing business owners in the state.

Wike instructed all business owners operating in the state to start remitting their VAT to the Rivers government starting from September 2021.

Lagos govt joins forces with Rivers in VAT battle against FIRS

Meanwhile, the Lagos state government on Friday, September 10, applied to the Court of Appeal in Abuja to be joined as a co-respondent in the appeal filed by FIRS against Rivers state.

The FIRS is challenging the judgment of the Federal High Court, Port Harcourt, which held that Rivers state has the power to collect VAT within its domain.

The Attorney General of Lagos, Moyosore Onigbanjo (SAN), informed the court of the state's interest to be joined as a party in the appeal.


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