…OPEN GRAZING PROHIBITION TOO
-FIRS TO TAX PAYERS: CONTINUE TO PAY YOUR VAT TO FIRS
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Governor Nyesom Wike of Rivers State has signed into law bills on Value Added Tax (VAT) collection in the state, amidst controversy that trails it with the Federal Government. Also signed into law was the Open Grazing Prohibition in Rivers State.
Signing the bill into law in his office, the governor said “the judgement of the Federal High Court sitting in Port Harcourt had sufficiently addressed the illegality perpetrated by the Federal Inland Revenue Services (FIRS) on behalf of the Federal Government in the collection of VAT in States.”
The governor stated this at the Government House, Port Harcourt, shortly after signing into law on Thursday, the Valued Added Tax Law No. 4 of 2021; the Open Rearing and Grazing Prohibition Law No 5 of 2021; the Child’s Rights Amendment Law No 2 of 2021; the Residents Registration Agency Law No 6 of 2021 and the Naming and Renaming of Infrastructure Law No3 of 2021. The signed bills were recently passed by the Rivers State House of Assembly.
The Rivers State Governor noted that when agencies of the Federal Government are allowed to illegally demand and collect taxes meant for states to collect, they strangulate the States financially and turn them to be beggars.
“But we (Rivers State) are standing on the part of history as representatives of the state to have taken the bull by the horn to challenge the illegality of the Federal Government through the Federal inland Revenue Services (FIRS).
“Of course, we are all aware that the states have already been strangulated. Most states depend on allocation from federation account; states have been turned to beggars. Hardly will any day pass that you won’t see one state or the other going to Abuja to beg for one fund or the other.”
The governor said “no campaign of calumny or blackmail on the part of FIRS will make what is illegal to become legal,” dismissing the FIRS’ propaganda that 30 states will suffer if some states are allowed to collect VAT.
Governor Wike pointed out that the concerns should be on establishing whose duty is it to collect VAT and the constitutionality of such position before talking about who is going to suffer or not.
“In this (Rivers) state, we awarded contract to companies and within the last month, we paid over N30billion to the contractors and 7.5% will now be deducted from that and to be given to FIRS.
“Now, look at 7.5% of N30billion of contracts we awarded to companies in Rivers State, you will be talking about almost N3billion only from that source. Now, at the end of the month, Rivers State Government has never received more than N2billion from VAT. So, I have contributed more through the award of contract and you are giving me less. What’s the justification for it.”
Speaking further, Governor Wike said there are plans already for FIRS to introduce Road Tax and this is likely to take away more duties from the States, and further emasculating them financially.
“Which are the roads? Are they the roads the State Government is paying for or the roads Federal Government has constructed? So, at the end of the day, they have taken over the functions of the State Government and the State is left with nothing.”
The governor remarked that the States have been so emasculated that they could barely survive without monthly revenue received from Federation Accounts Allocation Committee (FAAC).
The governor further stressed that the over bearing attitude of the Federal Government, impinges on attaining financial autonomy for the legislature and the judiciary, since the States are not allowed to collect due revenues as specified by the country’s constitution.
According to Governor Wike, with the Petroleum Industry Act (PIA) passed and signed into law, there shall be unbundling of NNPC, which means that NNPC remittance to the federation account will be less, requiring every state to look inwards on how to survive.
Governor Wike, while thanking the state lawmakers for their courage to have given the bill speedy passage, assured that every area that the law allows the state to collect revenue will be maximised for the survival of the state.
Speaking on the Open Rearing and Grazing Prohibition law No.5 of 2021, he said it is inimical to development and peace, for any state to condone opening grazing of cattle.
Governor Wike said cattle rearing is agricultural business and the law, which has specified ranching, is so intended in order to stem clashes between herdsmen who go to destroy farmlands, crops, and having problems with farmers that lead to fighting and killing of themselves.
“It is no longer a story. All of us know what our people have suffered in terms of this open grazing. Today, all Nigerians have come to accept the reality that open grazing is no longer fashionable. Even our brothers in the north have agreed that it is no longer fashionable.”
On the Child’s Rights Amendment Law No 2 of 2021, Governor Wike noted that with such law in place now, family courts can become operational in the State.
Wike said the Naming and Renaming of Infrastructure Law No3 of 2021 will promote the naming of public facilities after prominent Rivers people.
The governor also said that with the Residents Registration Agency Law No 6 of 2021, every resident in the State will be registered so that the State Government can know their status, what they do and where they reside for purposes of security planning.
On his part, the Speaker of the Rivers State House of Assembly, Rt. Hon. Ikuinyi-Owaji Ibani, described the collection of VAT by FIRS as the worst form of retrogressive tax in any tax regime.
He commended the governor and the state government for challenging the constitutionality of FIRS collection of VAT in States. According to him, the signing of the VAT law will ensure that Rivers’ people are not plunged into extreme poverty.
“I am tempered to believe that Nigeria, the world over, is the only country professing federalism but with a unitary constitution which is the very opposite of what federalism stands for.”
Speaking further, he said the law banning open grazing in Rivers State will serve as both cure to the symptom and the disease of herders and farmer bloody conflict.
He said lawmakers will continue to partner the executive in providing requisite laws that will advance the state for the good of posterity.
Leader of the Rivers State House of Assembly, Hon Martin Amaewhule, said lawmakers delineated and gave speedy passage to the bills because of their relevance to the socioeconomic progress of the State./
Rivers Judgment: Continue To Pay Your VAT To FIRS, Service urges taxpayers
Meanwhile, the Federal Inland Revenue Service (FIRS) has told taxpayers in the country to continue to pay their Value Added Tax (VAT) to the FIRS in order to avoid facing penalties for failing to do so.
The FIRS issued the directive following numerous enquiries to the Service in view of a recent judgment obtained by the Rivers State Government at the Federal High Court, Port Harcourt, which ruled that states, and not the Federal Government, are constitutionally empowered to collect VAT.
However, in a statement entitled, “Rivers Judgment: FIRS Urges Taxpayers to Continue to Pay VAT”, the FIRS disclosed that since the Service has already appealed the Rivers judgment in which appeal it is seeking a stay of execution order, the status quo ante subsists on the VAT collection authority, hence taxpayers should continue to pay their VAT to the FIRS.
The FIRS statement reads in full: “The attention of the Federal Inland Revenue Service (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 9th August 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 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 Judgement 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, members of the public are advised to continue to comply with their Value Added Tax obligations until the matter is resolved by the appellate court.”/SHARE THIS