The Appeal Court sitting in Abuja has ordered all parties to maintain the status quo and refrain from taking action that would give effect to the judgement of a Federal High Court in Port Harcourt that allowed the Rivers State government to collect Value Added Tax (VAT), pending the hearing and determination of the instant suit.
A three-man panel of the appellate court led by Justice Haruna Tsammani gave the order on Friday while ruling on an appeal filed by the Federal Internal Revenue Service (FIRS).
The order of the appellate court is the latest development in the series of legal tussles over whose responsibility it is to collect VAT.
Although the FIRS has taken up the responsibility over the years, the Rivers State government tested the legality recently, and it was worth the move.
On August 19, Governor Nyesom Wike assented to the Valued Added Tax Law, 2021 along with four others following their passage by the Rivers State House of Assembly.
His action was sequel to the judgement delivered by Justice Stephen Pam of the Federal High Court in the state capital who held that states should collect VAT, and not the Federal Government.
Displeased with the decision of the court, the FIRS filed a motion on notice to apply for a stay of execution on the earlier judgement delivered by Justice Pam.
As the legal battle continues, the action of the Rivers State government received the support of some states, especially Lagos where the government is close to making it a law to collect TAX, instead of the FIRS.
On Thursday, the bill seeking to empower Lagos to collect VAT was read for the third time and passed by lawmakers in the Lagos State House of Assembly.
Lagos State Governor, Babajide Sanwo-Olu, has since signed into law a bill empowering the state government to collect Value Added Tax (VAT).
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