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Tag: FIRS

  • BREAKING: Sanwo-Olu signs Lagos VAT Bill into law

    BREAKING: Sanwo-Olu signs Lagos VAT Bill into law

    Lagos State Governor, Babajide Sanwo-Olu has signed into law the State Value Added Tax (VAT) Bill as passed by the State House of Assembly.

    TheNewsGuru.com (TNG) reports Governor Sanwo-Olu signed the bill into law on Friday, following passage by the House.

    The bill is for a law to impose and charge VAT on certain goods and services.

    Sanwo-Olu signed the bill into law at about 11:45 am on Friday after returning from an official trip to Abuja .

    By this act, the Bill has now become a Law.

    Meanwhile, the Lagos State Government on Friday has applied to be joined as a co-respondent in the appeal filed by the Federal Inland Revenue Service (FIRS) against the judgement of the Rivers State High Court, which declared that the Rivers State Government had the right to collect Value-Added Tax (VAT) and Personal Income Tax in the state, and not the FIRS.

    Attorney-General of the state, Moyesore Onigbanjo, made the request at the Court of Appeal in Abuja on behalf of the state government.

    Onigbanjo told the court that the state’s interest was at stake, stressing that if they aren’t joined in the matter, it would amount to a breach of fair hearing.

    He urged the court to take the application for the joinder first before the FIRS’ application for a Stay of Execution of the judgement of the Rivers State High Court.

    The Counsel to the FIRS, Mahmud Magaji SAN, however, urged the court to hear the main application (stay of execution request) first, as that was of utmost priority.

    Subsequently, the head of the three-man panel, Justice Haruna Tsammani, stepped down the matter for ruling.

    A Federal High Court in Port Harcourt had on September 6 dismissed an application by the FIRS, seeking to stop the Rivers State government from enforcing the Rivers State High Court judgement vesting the power to collect VAT within Rivers State on the state government and not FIRS.

    The FIRS had, through a motion on notice, applied for a stay of execution on the earlier judgement delivered by Justice Stephen Pam, affirming the constitutional role of the state governments to collect VAT and not FIRS.

    However, the Appeal Court sitting in Abuja had earlier ordered all parties to maintain status quo and refrain from taking action that would give effect to the judgement of the Federal High Court in Port Harcourt that allowed the Rivers State government to collect VAT.

    A three-man panel of the appellate court led by Justice Haruna Tsammani gave the order on Friday while ruling on an appeal filed by the Federal Internal Revenue Service (FIRS).

    The court also ruled that the motion of joinder by the Lagos State government be heard and gave the applicants two days to file their written addresses.

    Similarly, the respondents have been given two days to file their response, while the applicants were given a day to reply on the point of law.

  • Lagos applies to join appeal filed by FIRS over VAT dispute

    Lagos applies to join appeal filed by FIRS over VAT dispute

    The Lagos State Government on Friday applied to be joined as a co-respondent in the appeal filed by the Federal Inland Revenue Service (FIRS) against the judgement of the Rivers State High Court, which declared that the Rivers State Government had the right to collect Value-Added Tax (VAT) and Personal Income Tax in the state, and not the Federal Inland Revenue Services.

    Attorney-General of the state, Moyesore Onigbanjo, made the request at the Court of Appeal in Abuja on behalf of the state government.

    Onigbanjo told the court that the state’s interest was at stake, stressing that if they aren’t joined in the matter, it would amount to a breach of fair hearing.

    He urged the court to take the application for the joinder first before the FIRS’ application for a Stay of Execution of the judgement of the Rivers State High Court.

    The Counsel to the FIRS, Mahmud Magaji SAN, however, urged the court to hear the main application (stay of execution request) first, as that was of utmost priority.

    Subsequently, the head of the three-man panel, Justice Haruna Tsammani, stepped down the matter for ruling.

    A Federal High Court in Port Harcourt had on September 6 dismissed an application by the FIRS, seeking to stop the Rivers State government from enforcing the Rivers State High Court judgement vesting the power to collect Value Added Tax, VAT, within Rivers State on the state government and not FIRS.

    The FIRS had, through a motion on notice, applied for a stay of execution on the earlier judgement delivered by Justice Stephen Pam, affirming the constitutional role of the state governments to collect VAT and not FIRS.

  • Daggers drawn over VAT collection in Rivers as FIRS appeals court judgement

    Daggers drawn over VAT collection in Rivers as FIRS appeals court judgement

    The Federal Inland Revenue Service (FIRS) on Wednesday said it has appealed the judgement of the Federal High Court in Rivers which held that the agency does not have the right to collect Value Added Tax (VAT) in the state.

    In a news conference in Abuja, FIRS Group Lead, Special Tax Operations, Matthew Gbonjugbola, said it is the exclusive right of the agency to collect VAT in the country.

    Gbonjugbola explained that the law mandating the FIRS to collect VAT seeks to protect businesses from multiple VAT.

    “I can confirm to you that FIRS indeed approached an appellate court to review the judgement of the lower court at the Federal Court of Appeal in Rivers,” he said.

    “Be assured that FIRS has filed an appeal and that one is in process and that is why we are not able to speak.”

    Speaking further, Gbonjugbola said VAT collection cannot work at the sub-national level, maintaining that the FIRS is empowered by law to do so.

    The FIRS official also dismissed purported plans by the agency to tax social media in Nigeria.

    TheNewsGuru.com, TNG reports that this is is coming days after a Federal High Court in Port Harcourt delivered a judgment restraining the FIRS from collecting VAT and personal income tax in Rivers State.

    TNG notes that VAT is a consumption tax paid when goods are purchased and services are rendered. It is charged at a rate of 7.5 percent.

  • Court rejects FIRS suit seeking to stop Rivers Government from collecting VAT

    Court rejects FIRS suit seeking to stop Rivers Government from collecting VAT

    Justice Stephen Dalyop Pam of the Federal High Court in Port Harcourt, Rivers State on Monday refused an application by the Federal Inland Revenue Service (FIRS), seeking to stop the Rivers State Government from collecting Value Added Tax (VAT).

    The Federal Inland Revenue Service filed the application in mid-August against the judgment of the same court which had on August 9 ruled that the Rivers State Government, and not the Federal Inland Revenue Service, is entitled to collect Value Added Tax and Personal Income Tax in Rivers State’s territory.

    The judgment was delivered in a suit filed by the Attorney General of Rivers State against the Federal Inland Revenue Service and the Attorney General of the Federation.

    Not satisfied with the judgment, the FIRS approached an Appeal Court to challenge the ruling.

    While the appeal was yet to begin, the revenue collection agency returned to the same Federal High Court in Port Harcourt to seek a stay of execution on the court’s decision, pending the determination of their appeal.

    In delivering his ruling on the application by the FIRS, Justice Stephen Dalyop Pam says FIRS failed to file an application to set aside the Rivers State Tax Law of 2021 which was recently enacted by the Rivers State House of Assembly and assented to by Governor Nyesom Wike on August 19, therefore the state law on Value Added Tax is valid and subsisting.

    The judge also ruled that the Federal Government already has a huge liability arising from the many years it has collected the tax on behalf of Rivers State, therefore it may be a difficult task for the Federal Government to refund the state if his judgment authorizing the state to collect the tax is upheld at the appellate courts.

    The judge believes that Rivers State can easily remit whatever amount it may have received within the litigation period to the Federal Government if it loses at the Appeal Court.

    While the Counsel to the Rivers State Government hailed the ruling, the lawyer to the Federal Inland Revenue Service is hoping to get favourable judgment at the Appeal Court.

  • VAT battle with FG: Wike blows hot, vows to enforce Rivers tax law

    VAT battle with FG: Wike blows hot, vows to enforce Rivers tax law

    Rivers State Governor, Nyesom Wike has vowed to enforce the State’s Value Added Tax Law 2021 to its letters, stressing that all corporate bodies, business entities and individuals that fail to comply will face the full weight of the law.

    Governor Wike especially directed the Rivers State Revenue Service (RSRS) to ensure the full and total implementation and enforcement of the law against all corporate bodies, business entities and individuals with immediate effect.

    TheNewsGuru.com (TNG) reports the Governor’s directive follows a Federal High Court judgement setting aside a stay-of-execution order the Federal Inland Revenue Service (FIRS) filed against a judgement of the Federal High Court, Port Harcourt, which upheld the constitutional right and authority of State Governments to impose, collect and utilize value added taxes (VAT) within their respective territorial jurisdictions.

    Speaking during a statewide broadcast on Monday, Governor Wike said that some States with presently low economic activities and ethically restrictive social policies with economic implications may be adversely affected for now, but that in the long run, States will benefit.

    The Rivers State Governor lambasted his Katsina counterpart, Aminu Masari, who Wike said is vainly conspiring to truncate the efforts by the Rivers State Government to collect VAT.

    Governor Wike’s text of the statewide broadcast reads: “My dear people of Rivers State, as we all know, following the recent judgement of the Federal High Court, Port Harcourt, which upheld the constitutional right and authority of State Governments to impose, collect and utilize value added taxes (VAT) within their respective territorial jurisdictions, the Rivers State Government enacted the Rivers State Value Added Tax Law 2021 to regulate the effective administration of VAT in Rivers State.

    “As expected, the Federal Government, through the Federal Inland Revenue Service (FIRS), disagreed and filed an appeal coupled with a request for stay-of-execution of the judgment before the Federal High Court.

    “While the appeal was pending and without any stay-of-execution of the subsisting judgement, the FIRS went about to bully corporate bodies and business entities from paying the VAT to the Rivers State Government even when they knew that an appeal does not serve as a stay neither was there anything to stay in a declaratory judgement.

    “As a mere agency of the Federal Government without any political authority the effrontery and impunity exhibited by the FIRS against the Rivers State Government was ill-advised and highly provocative.

    “However, being a government that believes in the rule of law we decided on our own to suspend the enforcement of the Rivers State VAT Law 2021 pending the outcome of the FIRS’s application for stay-of-execution.

    “Today, the FIRS has failed in its attempt to frustrate the enforcement of the State’s Law on VAT with the Federal High Court’s dismissal of its application for stay-of-execution of the judgement.

    “It is important to reiterate the fact that we did no wrong in exercising our legal right under our constitutional democracy to stop the continuing breach, denial and curtailment of the constitutional right of States to lawfully impose and collect value added and other related taxes within jurisdiction to the exclusion of the Federal Government.

    “And in doing so our singular and progressive objective was to contribute to the advancement of fiscal federalism by enabling the federating States to explore and exploit their potential and capacity for generating greater internal revenues with which to fund their development goals and reduce the outdated over-reliance on pitiable Federal allocation and other handouts.

    “Naturally, some States with presently low economic activities and ethically restrictive social policies with economic implications may be adversely affected for now.

    “But, this is not our own making. Like the right to derivation, this is also a constitutional prescription, which we all swore as political leaders to respect and defend as the supreme law of the land.

    “Above all, fiscal federalism remains the right path to economic self-reliance and sustainability for all our States and the benefits derivable from this case by all the States in the long run far outweigh the immediate revenue loss that some States may presently suffer.

    “All that is required is for all of us to wear our thinking caps as elected Governors to collectively fight for the greater devolution of resources, responsibilities and powers to the federating States.

    “It is therefore very unfortunate that some State Governors led by that of Katsina State are vainly conspiring to truncate this progressive reality in favour of the inequitable status quo so that the Federal Government can continue to rob Peter to pay Paul as the nation’s self-imposed tax master-general.

    “For us in Rivers State, we will continue to ensure and project our constitutional rights to access all possible resources we can take hold both within and outside our geographical boundaries to advance the progress of our State.

    “And with today’s judgement the way is now clear for the administration and enforcement of the Rivers State Value Added Tax Law 2021 across the entire State until otherwise decided and set aside by the Superior Courts.

    “Consequently, I hereby direct the Rivers State Revenue Service (RSRS) to ensure the full and total implementation and enforcement of this law against all corporate bodies, business entities and individuals with immediate effect.

    “All corporate bodies, business entities and individuals are advised to willingly, truthfully and promptly comply with their tax obligations under this law to avoid the full weight of the stipulated sanctions, including having their business premises sealed-up.

    “Let me warn that the Rivers State Government is fully in charge of the State and will not tolerate any further attempt by the FIRS to sabotage or undermine our authority to freely administer our tax and other related laws in our own State. Those who play with fire risks having their fingers burnt. Enough of the shenanigans.

    “I wish to further assure every resident that we shall as usual make effective use of the expected proceeds from this tax to accelerate the development of our State and improve the wellbeing of everyone”.

  • ICAN seeks amicable resolution of VAT collection dispute

    The Institute of Chartered Accountants of Nigeria (ICAN), has implored Rivers and Federal Governments to amicably resolve the issue of VAT collection, to protect taxpayers and provide certainty to businesses.

    Mr Ahmed Kumshe, the Registrar and Chief Executive of ICAN, gave the advice on Tuesday in reaction to the judgement of the Federal High Court in Suit No. FHC/PH/CS/149/2020.

    The matter is between the Attorney General of Rivers, Federal Inland Revenue Service (FIRS) and Attorney General of the Federation.

    The Federal High Court sitting in Port Harcourt had ruled in favour of Rivers in respect of the power to collect Value Added Tax (VAT), essentially giving power to states to collect VAT instead of FIRS.

    Kumshe advised that the matter must not be allowed to degenerate given the country’s precarious tax revenue position and the general business environment.

    He said that sustaining and replicating the position by other states would increase the cost and time required for compliance by businesses.

    This, he said, was in addition to the complexity of administering VAT at the subnational level, such as treatment of international and inter-state transactions.

    The ICAN registrar said that administering VAT at the state level might add to the myriad of taxes across different levels of government, many of which are targeted at the same tax base, thereby encouraging multiplicity of taxes.

    “Given the rapid development of events since the judgment, there is the need to guide our members, share our views with policymakers and educate the public and other stakeholders on the possible implications.

    “While the move by the Rivers State government seeks to promote the principle of fiscal federalism, we are of the view that the matter should be approached carefully to achieve a win-win outcome for all stakeholders.

    “Collection of VAT by states may be more demanding, especially in the short to medium term in the aspect of VAT skills and knowledge, dealing with digital transactions, VAT audit, and dispute resolution.

    “In the absence of exemption threshold for small businesses and limited list of exempted goods and services, there may be adverse effect on the masses in Rivers State especially poor households and SMEs,” he said.

    Kumshe said that the ongoing development presented an opportunity to re-examine Nigeria’s fiscal federalism and leverage on the ongoing Constitutional review to fashion out the most suitable fiscal structure for the country.

    According to him, the process should include a review of the VAT law, its administration and revenue sharing formula.

    This, he said, must be in a manner that strengthens the subnational level of government while ensuring uniformity of treatment as much as possible.

  • Despite court ruling, FIRS threatens to penalise Nigerians who pay VAT elsewhere

    Despite court ruling, FIRS threatens to penalise Nigerians who pay VAT elsewhere

    The Federal Inland Revenue Service (FIRS) has urged taxpayers to continue to pay their Value Added Tax (VAT) to it to avoid paying penalties for failure to do so.

    Mr Abdullahi Ahmad, Director, Communications and Liaison Department of the FIRS, gave the advice in a statement on Sunday in Abuja.

    He said the FIRS issued the directive following numerous enquiries in the aftermath of a recent judgment obtained by the Rivers government at the Federal High Court sitting in Port Harcourt.

    TheNewsGuru.com, TNG reports that the court had on August 9 ruled that the Rivers government, not the FIRS, was the rightful authority to collect VAT.

    Following the judgment, Gov. Nyesom Wike on Thursday, August 19 signed into law a bill which authorises the Rivers government to henceforth collect VAT in the state.

    The FIRS spokesperson explained that since the organisation had already appealed the judgment, in which it sought a stay of execution order and that the status quo ante should subsist on VAT collection.

    He said taxpayers should continue to pay their VAT to the FIRS.

    “The attention of the FIRS has been drawn to the trending report that on 19/08/2021, the Government of Rivers State took steps to enact a Value Added Tax Law for Rivers State following the Judgment of the Federal High Court Port Harcourt Division on August 9, 2021 in Suit No: CS/149/2020.

    “The suit was about who has the constitutional duty for the collection of VAT and Personal income tax in Rivers State.

    “We wish to inform the general public that before the above-mentioned steps taken by the Government of Rivers State, FIRS had lodged an appeal against the above judgment and had also filed an application for stay of execution of the judgment as well asking the court for an injunction pending the determination of the appeal.

    “All parties to the suit are aware that both applications were heard on the 19th and 20th August 2021 and are awaiting the decision of the court.

    “Given that the Court of Appeal is yet to rule on the Appeal from the Judgment of Federal High Court and that the Federal High Court is yet to deliver a ruling on FIRS’s applications for stay of execution and injunction” he explained.

    Ahmad urged the public to continue to comply with their VAT obligations until the matter is resolved by the appellate court.

  • Coy Income Tax increases by N472.07 billion in Q2 – NBS

    Coy Income Tax increases by N472.07 billion in Q2 – NBS

    The National Bureau of Statistics (NBS) says N472.07 billion was generated as Company Income Tax (CIT) in Quarter Two (Q2, 2021) as against N392.64 billion generated in Q1.

    The NBS said this on Wednesday in Abuja in its “Company Income Tax By Sectors Q2, 2021” data published on its website.

    The sum which reflected an increase of N79.43 billion over Q1 also reflected an increase of N70.04 billion over N402.03 billion that was generated in Q2, 2020.

    The NBS said that the figure represents 20.23 per cent increase Quarter-on-Quarter and 17.42 per cent increase Year-on-Year.

    “Professional services generated the highest amount of CIT with N130.09 billion generated, closely followed by other manufacturing which generated N87.27 billion, while banks and financial institutions generated N60.01 billion.

    “Textile and garment industry generated the least with N27.23 million, closely followed by automobiles and assemblies with N62.15 million and pioneering with N64.30 million generated.”

    The bureau said that out of the total amounted generated in the period under review, N412.74 billion was generated as CIT locally while N51.61 billion was generated as foreign CIT payment.

    It added that the balance of N2.72 billion was generated as CIT from other payments.

    In arriving at the report, data was provided by the Federal Inland Revenue Service (FIRS), verified and validated by the NBS.

  • VAT increase by N15.86bn in Q2 – NBS

    VAT increase by N15.86bn in Q2 – NBS

    Nigeria recorded an increase of N15.86 billion Value Added Tax (VAT) revenue from N496.39 billion generated in quarter one (Q1, 2021) to N512.25 billion in Q2.

    This is contained in the National Bureau of Statistics’ (NBS) “Sectoral Distribution of VAT Data for Q2, 2021’’, obtained on Tuesday in Abuja.

    It said the N512.25 billion generated in Q2 as against what was generated in Q1 and N327.20 billion generated in Q2 2020 represented 3.20 per cent increase quarter-on-quarter and 56.56 per cent increase year-on-year.

    The NBS said that manufacturing sector generated the highest amount of VAT with N44.89 billion and closely followed by professional services, N29.30 billion.

    “Commercial and trading generated N21.96 billion while textile and garment industry generated the least at N77.74 million closely followed by pioneering and pharmaceutical with N169 million and soaps and toiletries generated N188.71 million.”

    “Agricultural and plantations generated N760.02 million, automobiles and assemblies N868.06 million, banks and financial institutions N7.712 billion, breweries, bottling and beverages N3.47 billion, while building and construction accounted for N2.78 billion.

    It added that Federal Ministries and Parastatals accounted for N5.22 billion, hotels and catering N3.24 billion, Local Government Councils N399.91 million, Mining N8.11 billion and State Ministries and Parastatals N18.41 billion.

    The NBS said out of the total amount generated in Q2 2021, N187.43 billion was generated as non-import VAT locally, while N207.69 billion was generated as non-import VAT for foreign.

    It added that the balance of N117.13 billion was generated as Nigeria Customs Service-import VAT.

    The data for the report was provided by the Federal Inland Revenue Service (FIRS), verified and validated by the NBS.

  • FIRS dissolves Staff Union

    FIRS dissolves Staff Union

    The Board of the Federal Inland Revenue Service (FIRS) has dissolved the Nigeria Civil Service Union (NCSU), FIRS Unit.

    Mr Abdullahi Ahmad, the FIRS Director, Communications and Liaison Department made this known in a statement in Abuja on Monday.

    Ahmad explained that the union whose excecutives were purportedly made up of senior staff of FIRS, was dissolved in an official announcement circulated to all staff.

    “In line with Gazette No. 6 Vol 65 dated February 8, 1978 and National Industrial Court Judgement dated June 27, 1995, it is noted that the operations of Nigeria Civil Service Union (NCSU) FIRS Unit as it is constituted today in FIRS is considered illegal.

    “There are no longer any junior staff cadre employees in the service. There is accordingly no legal or other basis whatsoever for the continued existence of a junior staff cadre union in FIRS as the cadre of staff it is deemed to cover do not exist within the organisation.

    “A letter from Federal Ministry of Labour to the Head of Service of the Federation dated 19th February, 2015 confirmed the above position in categorical terms.

    “The statement further clarified that the right of workers to decide which union to belong is not absolute but must be exercised within the limits of Trade Unions Act CAP T14 LFN 2004.

    “This position was confirmed in the Judgment of the National Industrial Court – NCSU vs ASCSN (2004) 1NLLR Part 3, 427.

    “In the light of all the above, The FIRS Board at its Meeting No. 30 held on the 24th June, 2021 therefore directed that, in view of items 1 & 2 above, the activities of NCSU FIRS Unit in the Service are henceforth considered illegal.

    “And the Union (NCSU FIRS Unit) is hereby proscribed with immediate effect” he explained.

    The spokesperson said the management also assured staff that it was unreservedly willing to work and cooperate with the only legitimate representatives of staff.

    He said the management however urged the Association of Senior Civil Servants of Nigeria to redouble its effort in executing the FIRS mandate of assessing, collecting and accounting for tax revenue for all levels of government as contained in the FIRS Establishment Act (2007).