Value Added Tax crises
OpenLife Nigeria reports that governor Nyesom Wike of Rivers State, now dubbed the leading apostle of the much talked about restructuring who has led a Value Added Tax, VAT, war against the federal government which is a critical segment of true federalism, has accused President Muhammadu Buhari of bias and injustice.
VAT is a consumption tax paid when goods are purchased and services are rendered. It is charged at a rate of 7.5 percent.
Earlier, the Federal High Court sitting in Port Harcourt in its judgment last month in a suit marked FHC/PH/CS/149/2020 held that the Rivers State Government had the powers to collect VAT within its territory.
The Federal Inland Revenue Service, on Monday, prayed the court to stay execution on the judgment.
But the presiding judge, Justice Stephen Pam, rejected the application, saying granting it would negate the principle of equity.
On Monday, the Lagos State Government toed the path of Rivers State as a bill to empower it to collect VAT scaled second reading in the state House of Assembly.
Reacting on Wednesday, Wike said:
“In June N15.1bn was collected as taxes in Rivers State but N4.7bn was given to Rivers State, N46.4bn was collected from Lagos State but Lagos was given N9.3bn. Kano generated N2.8bn and was given N2.8 billion. Have you seen the injustice in this country? I will not be Governor forever, it’s not about me but about the system,” he lamented.
The governor has insisted on going on with his move to stop the Federal Government from collecting Value Added Tax from the oil-rich South-South state.
Wike, while addressing Shell Petroleum Development Company and other representatives of oil companies and business owners in the state, said he does not care if heaven falls, saying Rivers money is not meant for “Abuja people” but for the development of his state.
He has however threatened to shut FIRS offices in Rivers if the bullying continues
The governor warned the oil companies and business owners not to remit their VAT to FIRS but the Rivers State Government.
“I don’t want you to fall prey to the people who think they can use force to take our money.
“If you want to take advantage and say you don’t know who to pay to, it is a lie, you know.
“From this September, we will start collecting our VAT.
“We will not look back but seal up the premises of such companies,” Wike warned, adding that the state does not need the Nigeria Police Force to enforce the collection of VAT but would use the state-created security outfit backed by the law.