The federal government has announced that taxpayers across
the country should keep paying value-added tax (VAT) to the Federal Inland
Revenue Service (FIRS).
Zainab Ahmed, minister of finance, budget and national
planning, stated this in a notice issued on Thursday.
In August, a federal high court in Rivers state issued an
order restraining FIRS from collecting VAT and Personal Income Tax (PIT) and
directed the Rivers state government to take charge of the collection.
Following the court order, Rivers and Lagos established a
law to impose and charge VAT, however, the court of appeal in Abuja ruled that
states should maintain status quo pending the determination of an appeal filed
by the Federal Inland Revenue Service (FIRS).
Based on the appeal court’s decision, Rivers state
government took the lingering issue to the supreme court for final resolution.
Ahmed said the ruling by the court in Rivers state regarding
VAT collection was unclear and very regrettable and as result taxpayers have
been “confused” about who to pay the tax to.
“Government is facing serious revenue challenges, and
therefore this is not the time for litigation but all hands to be on deck to
pull through the difficult period.”
She said based on the court of appeal judgement to maintain
status quo “FIRS shall continue to administer VAT in all states of the
Federation unless the appellate court rules otherwise”.
“The ruling of the Court of Appeal, therefore, employs all
taxpayers in all the states to continue to pay their VAT, and for the FIRS to
continue to collect VAT on behalf of the government in compliance with the VAT
Act.
“The ruling of the Court of Appeal has provided the
much-needed certainty, clarity and consistency that will enable compliance
without disruption to business while the final resolution is awaited.”
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