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VAT Controversy: Court Halt Lagos, Rivers States From Collection

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The Court of Appeal sitting in Abuja has today stopped the states government of Lagos and Rivers from collecting the value Added Tax (VAT), say status-co to be maintained. There has been controversy recently that has rocked the VAT collection between the Federal Inland Revenue Services (FIRS) and some states government.

In his ruling today, the presiding judge, Haruna Simon Tsunami, ordered that the law passed by the Rivers State House of Assembly and subsequently assented by the state Governor, Nyesom Wike be put on hold pending to determination of the case.

Meanwhile, by this order, Babajide Sanwo-Olu, the Lagos state Governor who some hour later signed the VAT law into force in Lagos state stands null and void.

The FIRS approached the Court seeking a stay of execution of the order of the Rivers State High Court who ruled in favor of River state.

The Federal High Court in Rivers state had in August upheld the powers of the state government to collect VAT and personal income tax.

The High Court further issued a perpetual injunction restraining the FIRS and the Attorney General of the federation from collecting, demanding, or intimidating resident of Rivers state to pay to FIRS instead of the state government.

Subsequently, both Lagos and Rivers state Governments rushed and passed a law in response to the High Court order.

However, earlier application by the FIRS to the high court in Rivers to stay execution of the judgment on Monday was denied by Justice Stephen Dalyop Pam sighting that the application would negate the principle of equity as the state legislature had already enacted a law on the VAT collection.

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