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Appeal Court orders Rivers to halt VAT collection, as Lagos asked to be joined with Rivers as co-respondent

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The Lagos State government, on Friday, applied to the court of appeal, Abuja Division to be joined as a co-respondent with the Rivers State government in an appeal filed by the Federal Inland Revenue Service (FIRS) challenging the judgment of the Federal High Court, Port Harcourt on the right of state governments to collect VAT.

It can be recalled that a Federal High Court in Port Harcourt declared that the FIRS possesses no power to collect VAT and Personal Income Tax in Rivers State.

The Court of Appeal however stopped the Rivers State government from collecting Value Added Taxes VAT until all legal disputes relating to the matter are cleared.

Justice Haruna Simon Tsanami issued the order on Friday and also directed that the law passed by the Rivers state House of Assembly, signed by the Governor, Nyesom Wike must not be implemented.

The Judge argued that since both parties have submitted themselves to the authorities of the court for adjudication of the matter, they must not do anything that will destroy the subject matter of the appeal.

Justice Tsanami also granted a status quo ante in favour of the FIRS and against the respondents. The matter has been slated for September 16 for a hearing of the motion for joinder by Lagos State.

FIRS, in an appeal marked CA/PH/282/2021, is praying the court to set aside the judgment of a Rivers State High Court which granted powers to the state to collect Value Added Tax, VAT.

Earlier, the Attorney General of Lagos State, Moyosore Onigbanjo (SAN) informed the court of the decision to join the suit. This follows the passage of the state’s VAT bill by the Lagos State House of Assembly.

The FIRS on the other hand sought for a stay of execution of the trial court’s judgment.

Onigbanjo argued that the application for joinder should be taken first before FIRS’ application for stay of execution.

However, the counsel for the FIRS, Mahmoud Magaji (SAN) argued that their application for stay of execution should take precedence over the application for joinder.

The court stood down the matter for the ruling.