In a statement from its Director, Communications and Liaison
Department, Abdullahi Ismaila Ahmad, on Sunday, FIRS added it has also asked
for an injunction pending appeal and a Stay of Execution of the said judgment.
“As the decision is being appealed and in view of the
pending applications for injunction and stay of execution which the FIRS has
filed in court against the judgement, members of the public are advised to
continue complying with the Value Added Tax obligations until the matter is
resolved by the appellate courts in order to avoid accruing the consequent
penalties and interest for non-compliance.”
Justice Dalyop Pam in his ruling had said the constitutional
powers and competence of the Federal Government was limited to taxation of
incomes, profits and capital gains, which did not include VAT or any other
species of sales, or levy other than those specifically mentioned in items 58
and 59 of the Exclusive Legislative List of the Constitution.
The court agreed with the Rivers State government that it
was the state and not FIRS that was constitutionally entitled to impose taxes
enforceable or collectable in its territory of the nature of consumption or
sales tax, VAT, education and other taxes or levies, other than the taxes and
duties specifically reserved for the Federal Government by items 58 and 59 of
Part 1 of the Second Schedule of the 1999 constitution as amended.
The court, also declared that the defendant, FIRS and the
Minister of Finance were not constitutionally entitled to charge or impose
levies, charges or rates (under any guise or by whatever name called) on the
residents of Rivers and any state of the federation.
The Rivers State government, which was the plaintiff in the
case had pleaded with the court to declare that, by virtue of the provisions of
items 7 and 8 of Part II (Concurrent Legislative List) of the Second Schedule
of the constitution, the power of the Federal Government to delegate the
collection of taxes could only be exercised by the state government or other
authority of the state and no other person.
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