10 days after court judgement, Wike signs bill on VAT collection into law

Governor of Rivers state, Nyesom Wike has signed into law bill on value-added tax (VAT) collection in the state.

The Valued Added Tax Law No. 4 of 2021 was signed into law by Wike at the government house in Port Harcourt on Thursday .

Recall that a federal high court sitting in Port Harcourt on August 9, issued an order restraining the Federal Inland Revenue Service (FIRS) from collecting VAT and personal income tax (PIT) in Rivers state — a ruling already appealed by the revenue collection agency.

Wike maintained that the judgment of the federal high court had sufficiently addressed the illegality perpetrated by the FIRS.

He said when agencies of federal government are allowed to illegally demand and collect taxes meant for states, they strangulate the state financially and turn them to be beggars.

“But we (Rivers State) are standing on the part of history as representatives of the state to have taken the bull by the horn to challenge the illegality of the of the Federal Government through the Federal inland Revenue Services (FIRS),” Wike was quoted as saying in a statement by Kelvin Ebiri, special assistant (media) Rivers state governor.

“Of course, we are all aware that the states have already been strangulated. Most states depend on allocation from federation account. States have been turned to beggars. Hardly will any day pass that you won’t see one state or the other going to Abuja to beg for one fund or the other.”

“In this (Rivers) state, we awarded contract to companies and within the last month we paid over N30billion to the contractors and 7.5% will now be deducted from that and to be given to FIRS.

“Now, look at 7.5% of N30billion of contracts we awarded to companies in Rivers State, you will be talking about almost N3billion only from that source. Now, at the end of the month, Rivers State government has never received more than N2billion from VAT. So, I have contributed more through the award of contract and you are giving me less. What’s the justification for it.”

Wike lamented plans by the FIRS to introduce road tax which would take away more duties from the states and further emasculating them financially.

“Which are the roads? Are they the roads the state government is paying for or the roads federal government has constructed? So, at the end of the day, they have taken over the functions of the State government and the State is left with nothing.”