Governor Nyesom Wike has asked the Federal Inland Revenue Service to stop bullying corporate bodies in the state from paying their Value Added Tax to the Rivers State Internal Revenue Service.
Governor Wike said this in a statewide broadcast on Monday after a court ruling barring the FIRS from collecting VAT.
Wike alleged that the FIRS was bullying corporate bodies and business entities in the state for refusing to pay VAT to the federal agency.
He said Rivers State would not allow further collection of VAT from corporate bodies and businesses operating in the state by the Federal Government agency.
The governor argued that the FIRS 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.
Wike said: “Following the recent judgement of the Federal High Court, Port Harcourt, which upheld the constitutional right and authority of state governments to impose, collect and utilise VAT within their respective territorial jurisdictions, the Rivers State government enacted the Rivers State Value Added Tax Law 2021 to regulate the effective administration of VAT in Rivers State.
“As expected, the federal government, through the FIRS, disagreed and filed an appeal coupled with a request for stay-of-execution of the judgement before the Federal High Court.
“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 for paying the VAT to the Rivers State Government, even when they knew that an appeal does not serve as a stay neither was there anything to stay in a declaratory judgement.
“As a mere agency of the federal government without any political authority, the effrontery and impunity exhibited by the FIRS against the Rivers State Government was ill-advised and highly provocative.
“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’ 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.
“It is important to reiterate the fact that we did no wrong in exercising our legal right under our constitutional democracy to stop the continuing breach, denial and curtailment of the constitutional right of states to lawfully impose and collect value added and other related taxes within jurisdiction to the exclusion of the federal government.
“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 out-dated over-reliance on pitiable federal allocation and other hand-outs.”
Wike stressed that Rivers State would not tolerate any further attempt by the FIRS to sabotage or undermine its authority to freely administer VAT and other related laws in the state, saying: “Those who play with fire risks having their fingers burnt. Enough of the shenanigans.”
The governor noted that some states currently with low economic activities and ethically restrictive social policies, with economic implications, might be adversely affected for now, but pointed out that it was not Rivers State’s making.
Wike state: “Like the right to derivation, this is also a constitutional prescription, which we all swore as political leaders to respect and defend as the supreme law of the land.
“Above all, 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 outweighs the immediate revenue loss that some states may presently suffer.
“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.
“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.”
Wike said the state government would continue to ensure and project constitutional rights to access all possible resources that could take hold both within and outside the geographical boundaries to advance the progress of the state.
He, therefore, directed the Rivers State Revenue Service to ensure the full and total implementation and enforcement of the 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,” he said.