From TONY JOHN, Port Harcourt
Governor Nyesom Wike has directed the Rivers State Revenue Service (RSRS) to commence the full enforcement and implementation of the State Valued Added Tax Law 2021.
The governor gave the directive during a state-wide broadcast, on the heels of a ruling by a Federal High Court sitting in Port Harcourt, yesterday.
Justice Stephen Daylop Pam had dismissed Federal Inland Revenue Service (FIRS) application, in Suit No FHC/PHC/149/2021, seeking for a Stay of Execution on the earlier judgement of the court that stopped FIRS from collecting VAT, as it was constitutionally the role of state governments.
Justice Pam, in his ruling yesterday, said granting the application would negate the principle of equity.
He noted that, in as much as the Rivers government and the state legislature had enacted a law in respect of the VAT, that courts were bound to obey laws.
Governor Wike, shortly after the court ruling, directed RSRS to commence total enforcement and implementation of the VAT, warning that the state government would not tolerate any attempt from any quarters to sabotage the process.
He declared: “Consequently, I hereby direct the Rivers State Revenue Service (RSRS) to ensure the full and total implementation and enforcement of this law against all corporate bodies, business entities and individuals with immediate effect.
“All corporate bodies, business entities and individuals are advised to willingly, truthfully and promptly comply with their tax obligations under this law to avoid the full weight of the stipulated sanctions, including having their business premises sealed-up.
“Let me warn that the Rivers State Government is fully in charge of the State and will not tolerate any further attempt by the FIRS to sabotage or undermine our authority to freely administer our tax and other related laws in our own State. Those who play with fire risks having their fingers burnt. Enough of the shenanigans.
“As we all know, following the recent judgement of the Federal High Court, Port Harcourt, which upheld the constitutional right and authority of State Governments to impose, collect and utilize value added taxes (VAT) within their respective territorial jurisdictions, the Rivers State Government enacted the Rivers State Value Added Tax Law 2021 to regulate the effective administration of VAT in Rivers State.
“As expected, the Federal Government, through the Federal Inland Revenue Service (FIRS), disagreed and filed an appeal coupled with a request for stay-of-execution of the judgment before the Federal High Court.”
The governor noted that, while the appeal was pending and without any stay-of-execution of the subsisting judgement, the FIRS allegedly went about to bully corporate bodies and business entities from paying the VAT to the Rivers State Government, “even when they knew that an appeal does not serve as a stay neither was there anything to stay in a declaratory judgement.”
Wike stated: “As a mere agency of the Federal Government without any political authority the effrontery and impunity exhibited by the FIRS against the Rivers State Government was ill-advised and highly provocative.
“However, being a government that believes in the rule of law, we decided on our own to suspend the enforcement of the Rivers State VAT Law 2021 pending the outcome of the FIRS’s application for stay-of-execution.
“Today, the FIRS has failed in its attempt to frustrate the enforcement of the State’s Law on VAT with the Federal High Court’s dismissal of its application for stay-of-execution of the judgement.
“It is important to reiterate the fact that we did no wrong in exercising our legal right under our constitutional democracy to stop the continuing breach, denial and curtailment of the constitutional right of States to lawfully impose and collect value added and other related taxes within jurisdiction to the exclusion of the Federal Government.
“And in doing so, our singular and progressive objective was to contribute to the advancement of fiscal federalism by enabling the federating States to explore and exploit their potential and capacity for generating greater internal revenues with which to fund their development goals and reduce the outdated over-reliance on pitiable Federal allocation and other handouts.
“Naturally, some States with presently low economic activities and ethically restrictive social policies with economic implications may be adversely affected for now.
“But, this is not our own making. Like the right to derivation, this is also a constitutional prescription, which we all swore as political leaders to respect and defend as the supreme law of the land.
“Aboveall, fiscal federalism remains the right path to economic self-reliance and sustainability for all our States and the benefits derivable from this case by all the States in the long run far outweigh the immediate revenue loss that some States may presently suffer.”