Continue to pay VAT to FIRS, FG tells taxpayers

The federal government has announced that taxpayers across the country should keep paying value-added tax (VAT) to the Federal Inland Revenue Service (FIRS). 

Zainab Ahmed, minister of finance, budget and national planning, stated this in a notice issued on Thursday. 

In August, a federal high court in Rivers state issued an order restraining FIRS from collecting VAT and Personal Income Tax (PIT) and directed the Rivers state government to take charge of the collection.

Following the court order, Rivers and Lagos established a law to impose and charge VAT, however, the court of appeal in Abuja ruled that states should maintain status quo pending the determination of an appeal filed by the Federal Inland Revenue Service (FIRS).

Based on the appeal court’s decision, Rivers state government took the lingering issue to the supreme court for final resolution.

Ahmed said the ruling by the court in Rivers state regarding VAT collection was unclear and very regrettable and as result taxpayers have been “confused” about who to pay the tax to.

“Government is facing serious revenue challenges, and therefore this is not the time for litigation but all hands to be on deck to pull through the difficult period.”

She said based on the court of appeal judgement to maintain status quo “FIRS shall continue to administer VAT in all states of the Federation unless the appellate court rules otherwise”.

“The ruling of the Court of Appeal, therefore, employs all taxpayers in all the states to continue to pay their VAT, and for the FIRS to continue to collect VAT on behalf of the government in compliance with the VAT Act.

“The ruling of the Court of Appeal has provided the much-needed certainty, clarity and consistency that will enable compliance without disruption to business while the final resolution is awaited.”