Mike Ozekhome SAN
VAT: Ozekhome calls for ceasefire over Rivers, FIRS dispute, says appeal court ruling backs state
Reacting to an Appeal Court ruling, Friday, which ordered a status quo in the push by the Rivers and Lagos governments to commence collection of the value added tax (VAT) in a suit brought before it by the Federal Inland Revenue Service (FIRS), rights lawyer, Mike Ozekhome (SAN), has insisted that the appellant court has only endorsed the moves by the affected states.
Ozekhome, in a statement, Saturday, titled, ‘FIRS & Rivers State Government: Who Should Now Collect VAT?’ and made available to Oracle Today, said going by the interpretation of the Appeal Court ruling, it means that the Rivers Government has the power to collect VAT until the court decides otherwise.
It would be recalled that the Court of Appeal sitting in Abuja, had, Friday, ordered FIRS, Rivers and Lagos states to maintain the status quo on the collection of VAT, pending the determination of an appeal that was lodged before it by FIRS.
FIRS, in an appeal marked CA/PH/282/2021, had prayed the court to set aside the judgment of a Rivers State High Court which granted powers to the state to collect VAT.
In its ruling, appellate court said the order was to preserve the ‘Res,’ subject matter, of the appeal before it. Specifically, it ordered all the parties that have subjected themselves before it to ‘refrain from taking any action to give effect to the judgment of the Federal High Court,’ which gave Rivers State Government the right to collect VAT revenue, instead of the FIRS.
The three-man panel of Justices of the appellate court, led by Justice Haruna Tsammani, made the order after it deferred hearing of an application Lagos State filed to be joined as an interested party in the matter, till September 16.
Lagos State had through its Attorney-General, Moyosore Onibanjo, SAN, protested against the issuance of an order for the maintenance of status quo, insisting that such order could not be binding on it, since it was yet to be joined as a party in the appeal by FIRS.
While the River Governor, Nyesom Wike has signed the VAT bill passed by the state Assembly into law, last month, the Lagos Governor, Babajide Sanwo-Olu, only signed the bill into law last Friday, but sought to be joined in the suit already filed by Rivers challenging the legitimacy of FIRS to collect VAT on behalf the states.
A Federal High Court sitting in Port Harcourt last month in a judgment in suit number FHC/PH/CS/149/2020, held that the Rivers State Government had the powers to collect VAT within its territory.
However, in his interpretation of the “maintain status quo” position of the Appeal Court, Ozekhome said the ruling was even before the disagreement over right of collection.
“The hostilities broke out when the FIRS dragged the Rivers State Government to court, arguing that it cannot collect VAT based on its law. The said law was already duly passed and made operational by Rivers State House of Assembly that it has the constitutional competency under section 4 of the Constitution to do so.
“The FHC, Port Harcourt, Rivers State, had earlier held that it was the Rivers State Government that was competent to collect VAT, not the FIRS.
“The law was already therefore in operation before the FIRS challenged the validity of an FHC judgement, PH, that had given the Rivers State Government the power to collect the VAT.
“So, the status quo is that it is the Rivers State Government that has the power to collect VAT, until perhaps, the Court of Appeal rules otherwise and set aside the FHC judgment,” Ozekhome said.
The lawyer advised all parties to the dispute to ‘avoid unnecessary bickering and needless head-on collision over the matter that is already subjudice and cease hostilities by maintaining the status quo until the Court of Appeal finally pronounces on the matter.’
