Why federating units should see Rivers’ VAT victory as fiscal Federalism enabler – Wike

Governor Nyesom Wike, who has already directed the Rivers State Internal Revenue Service (RIRS) to ensure the full implementation and enforcement of the State’s Value Added Tax (VAT) Law, charged the states which are the federating units of the disputed Nigerian Federation to see the legal victory of Rivers State as a fiscal Federalism enabler.

Rivers State Governor Nyesom Wike, in a state-wide broadcast on Monday, September 6, 2021.

Governor Wike asserted in a statewide broadcast that with Monday’s judgement, the road is now clear for his administration to enforce the Rivers State Value Added Tax Law 2021, until otherwise set aside by a superior Courts.

The governor’s directive follows the Federal High Court in Port Harcourt dismissal of an application by Federal Inland Revenue Service (FIRS) for a stay of execution over the court’s judgment that declared Rivers State as constitutionally empowered to collect VAT within its jurisdiction.

“Consequently, I hereby direct the Rivers State Internal Revenue Service (RIRS) to ensure the full and total implementation and enforcement of this law against all corporate bodies, business entities and individuals with immediate effect.

“All corporate bodies, business entities and individuals are advised to willingly, truthfully and promptly comply with their tax obligations under this law to avoid the full weight of the stipulated sanctions, including having their business premises sealed-up.

“I wish to further assure every resident that we shall as usual make effective use of the expected proceeds from this tax to accelerate the development of our State and improve the wellbeing of everyone.”

He maintained that the benefits derivable from the judgement of the Federal High Court in Port Harcourt that empowered Rivers State Government to collect Valued Added Tax (VAT) within its jurisdiction, also extend to other states because it is their constitutional right and authority.

The Governor explained that what the Rivers Sate Government has done is to contribute to the advancement fiscal federalism, in which states can feel empowered to explore their potentials to generate internal revenue to address their development needs.

“And in doing so, our singular and progressive objective was to contribute to the advancement of fiscal federalism by enabling the federating States to explore and exploit their potential and capacity for generating greater internal revenues with which to fund their development goals and reduce the outdated over-reliance on pitiable Federal allocation and other handouts.

“Fiscal federalism remains the right path to economic self-reliance and sustainability for all our States and the benefits derivable from this case by all the States in the long run far outweigh the immediate revenue loss that some States may presently suffer.”

Governor noted that when the judgement was first delivered in favour of the Rivers State Government, the Federal Government, through the Federal Inland Revenue Service (FIRS), disagreed and filed an appeal and sought a request for stay-of-execution of the judgment before the Federal High Court.

According to Governor Wike, while the appeal was pending and without any stay-of-execution of the subsisting judgement, the FIRS went about to bully corporate bodies and business entities from paying the VAT to the Rivers State Government.

Governor Wike said, FIRS did so, even when they knew that an appeal does not serve as a stay, neither was there anything to stay in a declaratory judgement.

“However, being a government that believes in the rule of law we decided on our own to suspend the enforcement of the Rivers State VAT Law 2021 pending the outcome of the FIRS’s application for stay-of-execution.

“Today, the FIRS has failed in its attempt to frustrate the enforcement of the State’s Law on VAT with the Federal High Court’s dismissal of its application for stay-of-execution of the judgement.”

The governor stated that the Rivers State Government did no wrong in exercising its legal right under the country’s constitutional democracy to stop the continuing breach, denial and curtailment of the constitutional right of States.

Governor Wike said it was wrong for FIRS to impose and collect VAT and other related taxes within the jurisdiction of Rivers State.

“It is therefore very unfortunate that some State Governors led by that of Katsina State are vainly conspiring to truncate this progressive reality in favour of the inequitable status quo so that the Federal Government can continue to rob Peter to pay Paul as the nation’s self-imposed tax master-general.

“All that is required is for all of us to wear our thinking caps as elected Governors to collectively fight for the greater devolution of resources, responsibilities and powers to the federating States.

“For us in Rivers State, we will continue to ensure and project our constitutional rights to access all possible resources we can take hold both within and outside our geographical boundaries to advance the progress of our State.”