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VAT Collection Tussle: Appeal Court orders Rivers, Lagos to halt enforcement

The Court of Appeal in Abuja, on Friday, ordered the Rivers and Lagos state governments to stay action on their bids to collect Value Added Tax (VAT) pending the resolution of the legal dispute on the matter.

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A three-man panel of the appellate court ordered that the enforcement of the judgment of the Federal High Court, Port Harcourt, latched on to by the state governments be put on hold.

Haruna Tsanami, the judge who delivered the lead ruling of the panel, also suspended the operation of the law passed by the Rivers State House of Assembly and assented to by Governor Nyesom Wike, for the collection of VAT by the State government.

The court held that since parties had submitted themselves to the jurisdiction of the court for adjudication on the issue, they must not do anything that will destroy the subject matter of the appeal.

Specifically, Mr Tsanami granted “status quo ante bellum” in favour of the Federal Inland Revenue Service (FIRS) and against the respondents.

The suit was then fixed for September 16, 2021, for hearing of an application by the Lagos State government to join the suit.

Lagos State needed to apply to be joined in the case because it was not part of the case at the trial court.

FIRS in an appeal marked CA/PH/282/2021, is praying the court to set aside the judgment of the Federal High Court, in Port Harcourt, the Rivers State capital, which granted power to the state government to collect VAT.

The tax collection agency also asked the appellate court to stay the execution of Rivers’ judgment.

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