Federal High Court in Port Harcourt, Rivers State has declared that the Rivers State Government, RVSG and not the Federal Inland Revenue Services, FIRS, is entitled to collect the Personal Income Tax, PIT and the Value Added Tax, VAT, in the state.
The presiding Judge of the court, Justice Stephen Pam made the declaration, while delivering judgement in suit number FHC/PH/CS/149/2020, filed by the Attorney-General of Rivers State (Plaintiff), against the Federal Inland Revenue Services, FIRS (first defendant) and Attorney-General of the Federation, AGF, (second defendant).
Justice Stephen Daylop Pam further issued an order of perpetual injection restraining both the first and second defendants in the suit, which is the Federal Inland Revenue Service, FIRS, and the Attorney-General of the Federation, AGF, from demanding, collecting, threatening and intimidating residents of Rivers State to pay to Federal Inland Revenue Service, FIRS, personnel income tax and VAT.
The Federal High Court granted all the eleven reliefs sought by the Rivers State Government, on the grounds that there was no constitutional basis for the Federal Inland Revenue Service, FIRS, to either demand for and/or to collect VAT, Withholding Tax, Education Tax and Technology levy in Rivers State or any other state of the Federation.
Justice Stephen Pam dismissed the preliminary objections filed by the defendants that the court lacked the jurisdiction to hear the suit and that the case should be transferred to Court of Appeal for interpretation.
The Judge stated that the constitutional powers and competence of the Federal Government was limited to taxation of incomes, profits and capital gains, which did not include VAT or any other species of sales, or levy other than those specifically mentioned in items 58 and 59 of the Exclusive Legislative List of the Constitution.