Jacinta Onye
The Rivers State Governor, Nyisom Wike, has stirred the hornet’s nest Wednesday, when he issued a warning to the oil companies in the state ,reminding them that the ValueAdded Tax, VAT, generated from the state is not for Abuja people adding “I don’t care if heaven falls.”
Rivers State Governor, Nyesom Wike, insisted on going on with his move to stop the Federal Government from collecting Value Added Tax from the oil-rich South-South state.
Speaking at a stakeholders’ meeting in Port Harcourt, the state capital, while addressing Shell Petroleum Development Company and other representatives of oil companies and business owners in the state, Wike said he does not care if heaven falls, statedthat Rivers money is not meant for “Abuja people” but for the development of his state.
This move by the state government came sequel to earlier reports that the Federal High Court sitting in Port Harcourt in its judgment last month in a suit marked FHC/PH/CS/149/2020 held that the Rivers State Government had the powers to collect VAT within its territory.
But in a swift reaction, the Federal Inland Revenue Service, on Monday, took to the courts to ask for a stay execution of action on the judgment. A request which the presiding judge, Justice Stephen Pam, wasted no time in rejecting saying that granting it would amount to a negation of the principle of equity.
It appears that the move by the rivers state government and it’s seemingly partial victory may have spurred other state governors who immediately dusted up their grievances and previous cases against the federal government regarding VAT collection. For instance, the Ogun and Lagos state governments have indicated interest in towing the line of rivers.
On Monday, the Lagos State Government toed the path of Rivers State as a bill to empower it to collect VAT scaled second reading in the state House of Assembly.
VAT is a consumption tax paid when goods are purchased and services are rendered. It is charged at a rate of 7.5 per cent.
Speaking at the stakeholders’ meeting on Wednesday televised live on Channels TV and two other stations, Wike lamented about the injustice in the country saying Rivers generated N15bn in June 2021 but got N4.7bn while “Kano produced N2.8bn in June but Kano also got N2.8bn. Sometimes you don’t want to believe these things exist”.
The governor said he cannot continue to beg the Federal Government for what belongs to his state.
“People say that let heaven not fall but sometimes I believe that heaven should come down so that everybody will rest…When we do the right thing, heaven is at peace. So, the right thing must be done at all times,” he said.
, “Rivers State is challenging FIRS from collecting VAT in Rivers State. I am not challenging FIRS from collecting VAT in Abuja. Let it be understood. But the law says Rivers must collect VAT in the state,” Wike added.
“The Federal Government surreptitiously lobbied to amend the constitution to place VAT collection under the exclusive legislative list. “We have challenged it and we have no apologies to anybody.“I don’t want to be in the good book of anybody but in the good book of God.
“You don’t bully a state like us. FIRS should be very careful. I have the political will to do a lot of things. If they continue to bully us, I will take all their offices in the state,” he stated.
The governor who said that the state intends to begin VAT collection in September also warned the oil companies and business owners not to remit their VAT to FIRS but the Rivers State Government.
“I don’t want you to fall prey of the people who think they can use force to take our money.
“If you want to take advantage and say you don’t know who to pay to, it is a lie, you know.
“From this September, we will start collecting our VAT.
“We will not look back but seal up the premises of such companies,” Wike warned, adding that the state does not need the Nigeria Police Force to enforce the collection of VAT but would use the state-created security outfit backed by the law.
In a desperate move to regain its status as the national collector of all VAT’s in all the states of the federation, FIRS, has quickly written to the National Assembly praying for an exclusive power on VAT
The federal tax agency is also requesting the federal lawmakers to approve for it, the establishment of the Federal Revenue Court of Nigeria, and to put aside the judgment by a Federal High Court in Port Harcourt on August 10 restraining the FIRS from collecting VAT and personal income tax in Rivers State.
Although the FIRS had appealed the ruling, it however, failed to obtain a stay of execution it sought to prevent the state government from enforcing the verdict.