Rivers Governor, Nyesom Wike, yesterday, said that with the infraction of the constitutional provision on the collection of Valued Added Tax (VAT) addressed, his administration has commenced full implementation of the state’s VAT law without hesitation.
The governor, at an interactive session with representatives of corporate organisations at the Banquet Hall, Government House, Port Harcourt, yesterday, ordered the business community in the state to be ready to pay VAT for the month of September 2021, and subsequent months to the Rivers State Internal Revenue Service.
He said it was necessary for him to address them and to state the position of the law to the business community in the state.
He said such understanding would enable them not to fall prey to antics that could be deployed by the Federal Inland Revenue Service (FIRS), whom he accused of contemplating using force to collect what did not belong to them.
The governor warned corporate organisations not to feign ignorance of the state VAT law, declaring the state government would not hesitate to seal up premises of any company that defaulted in tax remittance to the state.
Wike said FIRS had in the past collected VAT in the state with impunity, knowing it was unconstitutional for them to do so.
He described as morally offensive a situation where Rivers State government would award contracts for state roads worth N200 billion and FIRS would illegally receive 7.5 per cent of the amount as VAT to be distributed among other states.
He said his administration challenged their impunity in court and the Federal High Court in Port Harcourt, in its declarative ruling, stated that the constitution was right in vesting powers to collect VAT with state governments. He described as unfortunate FIRS’s resort to writing threatening letters to intimidate corporate organisation to pay to them, even after they had lost an appeal that sought a stay of execution of the declarative ruling on VAT collection in the state.
Wike said his responsibility in office included making sure that Rivers people were not denied their entitlements.
“We are going to inaugurate the Tax Appeal Commission by Friday, which will be headed by a retired judge of the state.”
Wike described the disparity in VAT proceeds and what is given to the states as an inexplicable form of injustice that weakens the performance potential of states.
“Let me tell you the injustice in this country. In the month of June, 2021, which we shared in July, VAT collected in Rivers State was N15.1 billion. What they gave us was N4.7 billion. See the gross injustice and these money includes contracts awarded by the Rivers State Government.
“This is not an issue of party, it is the issues of infraction of the constitution, issues of illegality. Look at Lagos, it is not the same party with me. In the month of June, 2021, the VAT collected in Lagos was N46.4 billion. But, see what Lagos got, N9.3 billion. Have you seen the injustice in the country? VAT collected in Kano was N2. 8 billion and they gave them N2. 8 billion. Is there any justice in this country? So, you allow me to call the big companies, award contracts to them, then, you, FIRS, come and collect the tax and then go and distribute it to other states who are not awarding contracts. How does it sound?”
Meanwhile, Rivers government has debunked a report alleging that Governor Wike in his recent broadcast had said states which forbid sales of alcoholic beverages would no longer enjoy Valued Added Tax (VAT) generated from the state.
Special Assistant to the Governor on Media, Kelvin Ebiri, in a statement, yesterday, said the report credited to the governor was the handiwork of purveyors of lies, who want to cause public disaffection.
“The attention of the Rivers State Government has been drawn to a false online publication credited to Governor Nyesom Wike. In the said publication circulating on social media, the purveyors of lies alleged that Governor Wike in a statewide broadcast on Monday, September 6, 2021, asserted that states which forbid sales of alcoholic beverages within their jurisdiction can no longer continue to enjoy Value Added Tax, (VAT) receipts generated from Rivers State.
“While it is true that Governor Wike made a statewide broadcast on the aforementioned date, shortly after the Federal High Court in Port Harcourt dismissed Federal Inland Services (FIRS) request for a stay of execution on the judgement of the court which declared Rivers State as constitutionally empowered to collect VAT and other related taxes in the state, he never said states that forbid sales and consumption of alcoholic beverages will no longer benefit from VAT generated in Rivers State. The Rivers State government considers this obnoxious publication malicious, politically motivated and intended to fan the embers of hatred and cause public disaffection.”
The government urged members of the public to disregard the said publication.