The Federal High Court sitting in Port Harcourt, has ruled that the Federal Inland Revenue Services (FIRS) lacks the power to collect the Valued Added Tax (VAT) and Personal Income Tax (PIT) in the state.
The court declared that the Rivers State Government should be responsible for collecting these taxes.
The court, presided over by Justice Stephen Dalyop Pam, also issued an order of perpetual injunction restraining the Federal Inland Revenue Service and the Attorney-General of the Federation, both first and second defendants in the suit, from collecting, demanding, threatening and intimidating residents of Rivers State to pay to FIRS, personnel income tax and VAT.
Justice Pam made the declaration while delivering judgment in suit No. FHC/PH/CS/149/2020, filed by Attorney-General for Rivers State (plaintiff), against the FIRS (first defendant) and the Attorney-General of the Federation (second defendant).
The court, which granted all the eleven reliefs sought by the Rivers State Government, stated that there was no constitutional basis for the FIRS to demand for and collect VAT, Withholding Tax, Education Tax and Technology levy in Rivers State or any other state of the Federation.
Pam said 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.
