VAT controversy: FIRS may lose N2.4tn revenue to states

The Federal Inland Revenue Service may lose over N2.4tn revenue to the 36 state governments in 2022 if it loses its appeal against a Federal High Court verdict which barred it from collecting the Value Added Tax and Personal Income Tax.The N2.4tn is what the FIRS projects to collect from the VAT if retains the authority to collect consumption based tax, a document available to our correspondent has shown.

The FHC sitting in Port Harcourt, the Rivers State capital, had on August 10 ruled that states and not the FIRS have the legal rights to collect VAT and income tax.

The FIRS has appealed the judgement.

Meanwhile, the governments of Lagos and Rivers states have expressed their readiness to begin the collection of Value Added Tax in accordance with the judgment.

SUNDAY PUNCH reported that the Rivers State Governor, Nyesom Wike, had signed into law the bill that empowers the state to collect VAT, while the Lagos State Government said it had already notified all the stakeholders involved in the payment and receipt of VAT of its resolve to enforce the judgment to the letter.

These are in spite of the opposition by the FIRS, which already filed an appeal against the judgment. Some northern states say they prefer the Federal Government to continue collecting the tax.

Source: Punch NG