The Federal Inland Revenue Service (FIRS) has stated that it will not stop collecting Value Added Tax (VAT) from businesses operating in the country.
This was contained in a letter authorized by the Executive Chairman of the FIRS, Muhammed Nami, dated August 24 and addressed to Moyosore Onigbanjo, the attorney general and commissioner for justice in Lagos state.
Following a Federal High Court order directing the FIRS to halt its collection of VAT and Personal Income Tax (PIT) from the state, the Lagos state government had directed the FIRS to desist from issuing demand notices for payment of VAT in the state and to render accounts, within seven days, of all sums collected as VAT in the current accounting circle in the state.
This landmark judgment means other state governments can implement the judgment on VAT collection
However, the FIRS stated that it has filed an appeal against the judgment as well as a stay of execution and asked the public to maintain a status-quo on the payment of the taxes.
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In the letter written to the Lagos commissioner, Nami stated that since the Rivers court decision has been appealed, “the law does not allow a party to a suit to carry out an action to forestall the decision of the appellate court once an appeal has been entered”.
It further stated that there were contrary rulings by similar courts on the same matter.
FIRS added that parties must maintain the status quo until the decision of the appeal court.
“The instant judgement of the Federal High Court, Rivers State, is in conflict with the extant judgement of the Federal High Court, Kogi State on the same subject matter i.e. the validity of VAT Act as administered by the Service,” the letter reads.
“The conflict created by the later judgement can only be resolved by the appellate court; and the right of the appellate court in this wise should not be compromised.
“In view of the foregoing, parties have to maintain the status quo ante (i.e. their positions before the instant judgement of the Federal High Court, Rivers State).
“The FIRS shall continue to collect VAT and administer the VAT Act until the final resolution of the legal dispute by the relevant appellate court.”
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