Kingsley Moghalu, former presidential candidate of the Young Progressives Party (YPP), has described the recent judgment of the federal high court in Port Harcourt, Rivers state, on value-added tax (VAT) collection as the “correct one”.
Last month, the court issued an order restraining the Federal Inland Revenue Service (FIRS) from collecting VAT and Personal Income Tax (PIT) — directing the Rivers state government to take charge of the collection.
Nyesom Wike, Rivers governor, went ahead to sign a bill on VAT collection into law. Wike also informed businesses that payment to the state government would commence in September.
However, FIRS still insists that taxpayers must continue to honour their tax obligations under the VAT Act until the court of appeal or supreme court gives a final verdict on the issue.
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Speaking on the development, Moghalu said the court order in favour of Rivers state struck “a blow at the lazy federal government.”
In a series of tweets on Wednesday, the former deputy governor of the Central Bank of Nigeria (CBN) said he expected that the court order will be appealed up to the supreme court.
“The Federal High Court ruling on VAT is the correct one, though we can expect litigation to the Supreme Court. It strikes a strong blow at THE LAZY FEDERAL GOVERNMENT whose head once called our youth “lazy”. Nigeria has long been a fiscally failed state,” the tweet reads.
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“Why should states in a supposed federation be producing mainly for @NigeriaGov?#Restructuring has already begun, by fire by force. I pity those who think they can stop the wind.”
Meanwhile, controversies regarding VAT collection have been on the trail between the FIRS and the Lagos state government.
Lagos had directed FIRS to stop issuing demand notices for payment of VAT in the state following the judgement of the federal high court in Port Harcourt on August 9, 2021.
The state house of assembly passed the VAT bill (bill empowering Lagos to collect VAT) into law on Thursday.
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