The Abuja division of the Court of Appeal has stopped the governments of Rivers and Lagos from collecting Value Added Taxes (VAT).
Justice Haruna Simon Tsanami in a ruling on Friday also directed that the law passed by Rivers State House of Assembly and assented to by Governor Nyesom Ezenwo Wike be put on hold.
The appellate court’s decision followed an application by the Federal Inland Revenue Service (FIRS), seeking a stay of execution of the order of a Rivers State high court in the matter.
Recall that a Federal High Court in Port Harcourt had in August upheld the powers of the state to collect VAT and Personal Income Tax.
The court also issued an order of perpetual injunction restraining the FIRS and the Attorney General of the Federation, from collecting, demanding, threatening and intimidating residents of Rivers to pay to FIRS, personnel income tax and VAT.
After the ruling, the Rivers and Lagos state governments enacted legislations to give effect to the judgment in respect of VAT.
However, the appeal Court ordered that the judgment of the Federal high court from which the state drew authorities to collect the tax not be implemented.
The appellate court held that since parties have submitted themselves to the authorities of the court for adjudication of the matter, they must not do anything that will destroy the subject matter of the appeal.
In specific terms, Justice Tsanami granted status quo ante in favour of the Federal Inland Revenue Services FIRS and against the respondents.
The matter has been slated for September 16 for a hearing of the motion for joinder by Lagos State.
FIRS, in an appeal marked CA/PH/282/2021, is praying the court to set aside the judgment of a Rivers State High Court which granted powers to the state to collect Value Added Tax, VAT.
