Court bars FIRS from demanding, collecting VAT, PIT, other taxes in states

The Federal Inland Revenue Service (FIRS) has been ordered to stop demanding and collecting value-added tax (VAT) and personal income tax (PIT) across Nigeria.

A federal high court presided by Justice Stephen Pam in Port Harcourt, gave the directive on Monday, stating that the law doesn’t back FIRS authority above state governments.

The tax agency (first defendant) and the attorney general of the federation (second defendant) had been dragged to court by the Rivers State government over 11 reliefs, which includes collection of VAT and PIT.

Read also: FIRS moves to freeze Multichoice’s accounts in bid to recover $4.4bn tax defaults

The state said it is the only authorised collector on behalf of the Federal Government, as well as its agency according to provisions in Part II (concurrent legislative list) of the Second Schedule of the 1999 constitution as amended.

However, FIRS had been making demands, threats and intimidating Rivers State residents to pay PIT and VAT.

Before Justice Pam gave the ruling, FIRS denanded a transfer of the case with suit No. FHC/PH/CS/149/2020 to the Appeal Court, objecting that the FHC has no jurisdiction to hear the suit.

The judge dismissed the objection, stating that FIRS is not constitutionally empowered to demand and collect VAT, withholding tax, education tax and technology levy in any state in Nigeria.

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