Friday, August 27, 2021 / 04:19 PM / by CITN / Header Image
Credit: Opinion Nigeria/Ecographics
Governor of Rivers State, Barr Nyesom Wike on the 19th of August
2021 signed into law the Rivers State Value Added Tax Law which provides for
the imposition and administration of Value-Added Tax (VAT) in Rivers State. The
Value Added Tax Law No. 4 of 2021 imposes VAT at 7.5% on the supply of taxable
goods and services except those exempted under the Schedule to the Law.
Rivers State Internal Revenue Service (RSIRS) is empowered by the law to
administer, implement, assess, collect, and account for money collected. This
follows the ruling of the Federal High court, Port Harcourt Division on Monday
August 9, 2021 in the matter of Attorney General for Rivers State vs FIRS and
Attorney General of the federation Suit No FHC/PH/CS/149/2020 which issued an
order restraining the Federal Inland Revenue Service (FIRS) from collecting VAT
and Personal Income Tax (PIT) in Rivers State.
notable provisions of the Law are highlighted hereunder:
taxable person under the Law is required to register with the Board within 6
months of commencement the Law or 6 months of commencement of business
whichever is earlier.
for VAT under the Law is a condition for obtaining a contract from a government
ministry, agency or statutory body.
non-resident company that carries on business within the State is to register
for the tax with the Board using the address of a person with whom it has a
subsisting contract. The NRC is to include the tax in its invoice while
remittance is to be made by the person to whom the goods or services are
supplied in the State in the currency of the transaction.
to register for the tax within the time specified is a punishable offence.
16(20 mandates payment of the tax on taxable imported goods before they are
a person disagrees with the amount assessed, he may object to the RSIRS. Appeal
against the position of the Board lies to the Tax Appeal Commission and further
appeal lies to the State High Court. It is not clear what will happen to
appeals pending the setting up of a Tax Appeal Commission in the State.
15 stipulates that the tax should be remitted on or before the 21st
day of the following month.
Schedule to the Law exempts the following goods and services from payment of
- All medical and pharmaceutical
- Basic food items
- Books and educational materials
- Baby Products
- Fertilizers, locally produced
agricultural and veterinary medicine, farming machinery and farming transportation
- All exports
- Plant, machinery and goods imported
for use of the company are for export, otherwise, tax shall accrue
proportionately on the profits of the company.
- Plant, machinery and equipment
purchased for the utilization of gas in downstream petroleum operations.
- Tractors, ploughs and agricultural
equipment and implements purchased for agricultural purposes.
- Medical services.
- Services rendered by the Community
Banks, Micro Finance Banks and Mortgage Institutions.
- Plays and performances conducted by
educational institutions as part of learning.
- All exported services
- The state government shall receive 70% of the
revenue while 30% shall go he local governments.
- There is no exemption for small and medium
enterprises with turnover of less than N25 million as is obtainable in the
federal VAT Law as amended.
Institute notes that currently the FIRS has appealed the judgement in the
above-mentioned case that led to the promulgation of the Rivers State VAT law.
It would be premature to issue a position at this stage considering the fact
that the case is still in Court. One thing we do know is that the outcome of
the case would impact greatly on the administration of VAT in Nigeria.
- The VAT Conversation: Time to Return Collection to States?
Nigeria Needs to Improve Tax Revenue to GDP - Boniface Chizea
- The NASENI
Levy - Why Is It Being Pursued at This Time?
Dividend from Raising the Rate of VAT
- N512.25bn Generated as VAT in Q2
2021, Increases by 3.20% QoQ - NBS
- AG. Rivers v. FIRS: CITN Will Take an Informed Position After
Studying the Court Judgement
- Rivers State,
Not FG Should Collect VAT'- The Judge 'Erred
- Court Declares
Rivers State Government, Not FIRS Entitled to Collect VAT-Related Taxes in
- Administration of Value Added Tax In Nigeria: Goods And Services
- FIRS Requires Taxpayers to File VAT and CIT Returns on the e-Filing
- N496.39bn Generated as VAT in Q1 2021 - NBS
- FIRS Issues Guidelines on the Applicability of VAT on Toll, Parking
and Other Related Services
- FIRS Issues Guidelines on the Applicability of VAT on Financial
- N454.69bn Generated as Value Added Tax in Q4 2020 - NBS
Generated as VAT in Q3 2020 - NBS
TAT Declares Commercial Rent Liable to VAT
- Tax Appeal Tribunal Delivers Conflicting Decisions on Whether VAT is
Chargeable on Property Leases