NECA warns member organizations against remitting VAT to Rivers, Lagos States

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The Nigeria Employers Consultative Association (NECA), an umbrella organization of the organized private sector, has directed all its members nationwide to make their value added tax remittances for the month of August to the Federal Inland Revenue Service (FIRS) in line with Court of Appeal order on maintenance of status quo following the order of the PortHarcourt Division of the Federal High Court favouring Rivers State against the federal government on collection of VAT.

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Recall that the FIRS had sought for stay of execution of that order and subsequently approached the Appellate Court which ordered for maintenance of status quo until final determination of appeal on the matter.

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NECA Director General, Timothy Olawale, said in a document: “Consequently, all VAT collected for the month of August, 2021 should be remitted to the FIRS based on the Order of the Court of Appeal.”

This instruction comes against the backdrop of the raging feud between the FIRS and states, championed by Rivers, regarding who’s the rightful authority to collect the consumption remittances.

The organised private sector had raised concerns over the tax controversy as the deadline for August remittances falls due, September 21.

The FIRS had been collecting the consumer tax in all states of the federation before being challenged in Rivers State by the Port Harcourt Division of the Federal High Court. Justice Stephen Pam’s landmark judgement held that the federal government lacked constitutional power to collect VAT.

The revenue collection agency then approached the Appeal Court to challenge the judgement, whose ruling ordered all parties in the suit to maintain status quo on the moves by individual states to start collecting the tax.

Rivers and Lagos went ahead to try to domesticate the law in their respective states in August and September, respectively.  Meanwhile, Rivers State has instituted action at the Supreme Court challenging the Court of Appeal’s order./SHARE THIS

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