The Rivers State Governor, Nyesom Wike, has insisted that the state government would go ahead with its move to stop the Federal Government from collecting Value Added Tax (VAT) from the oil-rich state.

This is as the state governor had accused the Federal Government through the Federal Inland Revenue Service (FIRS) of usurping the functions of the states with the collection of VAT.

This was made known by Governor Wike while speaking at a stakeholders’ meeting that includes representatives of oil companies and business owners in the state on Wednesday in Port Harcourt.

The Governor at the meeting which was shown live on Channels Television, said he does not care if heaven falls, insisting that Rivers money is not meant for Abuja people but for the development of his state.

Wike, who expressed surprise at the level of injustice in the country said that Rivers State generated about N15 billion as VAT in June 2021 but received only N4.7 billion, Lagos State generated over N46 billion as VAT in June, but got just over N9 billion, whereas Kano State generated N2.8 billion and also got N2.8 billion as allocation.

The governor said he cannot continue to beg the Federal Government for what belongs to his state as some other state governors are doing and threatened to shut down all FIRS offices in the state if they continue to bully the state.

He said, “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.

“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.”

“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.’’

The governor warned the oil companies and business owners not to try and take advantage of the situation and say that they don’t know who to pay to as their VAT should be remitted to the Rives State Government and not FIRS.

He said that the state will start collecting its VAT from this September, and threatened to seal up premises of companies that fail to remit their taxes, 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.

What you should know

It can be recalled that on August 9, 2021, a Federal High Court sitting in Port Harcourt in its judgment in a suit marked FHC/PH/CS/149/2020 held that the Rivers State Government had the powers to collect VAT and Personal Income Tax within its territory.
The FIRS, who had earlier appealed the judgement, on Monday, applied for a stay execution on the judgment, however, the presiding judge, Justice Stephem Pam, rejected the application, saying granting it would negate the principle of equity.
On Monday, the Lagos State Government toed the path of Rivers State as a bill to empower it to collect VAT passed the first and 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.