A legal expert speaking on Channels TV’s Politics today while interpreting the Judgement of the Appeal Court sitting in Abuja on Friday stated that the judgement does not stop Rivers State from collecting Value Added Tax (VAT) in the state.
In its ruling on an appeal filed by Federal Inland Revenue Services (FIRS), the appellate court led by Justice Haruna Tsammani had ordered all parties including Rivers and Lagos states to “refrain from taking any action to give effect to the judgement of the Rivers State High Court,” which allowed the Rivers State government to collect (VAT) revenue instead of the FIRS.
Mr. Ebun-Olu Adegboruwa SAN in his explanation stated the given that Rivers and Lagos Houses of Assemblies have already passed a law authorizing the collection of Value Added Taxes (VAT) in their respective states, and both laws have already been accented to by the Governors, and if both legislatures are not subject of the appeal pending before the Appeal Court, it will therefore mean that the legislatures will not be subject to the order to “maintain status quo.”
He went further to state that the order to maintain status quo is with regards only to the judgement of the Federal High Court sitting in Rivers State, which does not even include Lagos State.
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When asked to break it down in layman language, the SAN was asked a direct question by Channels TV Anchor; “Who will collect the VAT as at today in Rivers State?”
The understanding of the SAN in his response to the above question, was that Rivers state has two fronts in law under which it can collect VAT, the first being the judgement of the Federal High Court sitting in Port Harcourt, but because that ruling has been impeded by the Appeal Court in Abuja, it cannot use it as at today.
It also has the right to collect it under the Value Added Tax law of Rivers State which was passed after the judgment of the Federal High Court sitting in Port Harcourt.
Since the law is not subject to any litigation before any court of law or pronouncement, and the fact that the Federal High Court sitting in Abuja has no jurisdiction to make any pronouncement with respect to a law that is not before it cannot pronounce judgement, “as we speak tonight, this moment, the value added tax law of Rivers state and of Lagos State are in operation, and anyone who is dissatisfied with those laws will have to go to court to obtain a pronouncement.”
For FIRS, it cannot collect VAT because the court of appeal have asked it to stay and maintain status quo. For Rivers State it cannot rely on the judgement to collect VAT, but it can fall back on the law that is in existence because that law has not been stopped by any court in Nigeria.
Nnamdi Maduakor is a Writer, Investor and Entrepreneur