After a lull into the confusion arising from the row over Value Added Tax (VAT), many manufacturers and service-based companies have started remitting the tax to the Federal Inland Revenue Service (FIRS), it was learnt at the weekend.
Remittance of VAT for August was due for returns on September 21.
Sources at the Ministry of Finance, Budget and Planning told our correspondent that the firms that paid were mindful of the law and the consequence of not paying.
Attorney-General of the Federation and Minister of Justice Abubakar Malami as well as Minister of Finance Mrs Zainab Ahmed last week reiterated that the tax should be remitted to the FIRS.
This is contrary to the Rivers and Lagos State laws authorising the payment of VAT to them.
The Finance Ministry source said: “There are a few companies that haven’t complied yet.”
He said such companies should realise that the two laws on VAT payments “remain in force.”
He said: ”The laws are yet again applicable. Penalties and interests would apply to defaulters.
“The FIRS is empowered by its Act to place a lien on the accounts of defaulting companies and even seal their premises.”
The agency, he said, was determined to enforce the laws through its enforcement department but before then, it would initiate an appeal.
The source added that the reason for the appeal “is to make taxpayers feel comfortable to come forward to carry out their civic duties rather than being cowed into paying tax.”
He said: “However where the appeal fails, recalcitrant companies will have their premises sealed, penalties and interests given against them, and in serious cases, their bank accounts frozen.”
The source also assured that FIRS would continue to disburse VAT proceeds to the beneficiaries in spite of the ongoing court cases.
“What the Court of Appeal’s status quo order means is that whatever was operational before the judgment of the Federal High Court, is to remain the position of things
“The VAT Act and the Finance Act 2020 remain in force and are applicable. This means that the formula for sharing to beneficiaries would continue as has been the case. They will receive their portions as stipulated under our extant laws.”
When contacted, Rivers state Commissioner for Information, Mr. Paulinus Nsirim, said the state was abiding by the Appeal Court ruling for all parties to go back to the status quo.
The war on VAT broke out in August when the Federal High Court, sitting in Rivers State gave a judgment that states and not the Federal Government should collect VAT.
Following this, the Rivers State House of Assembly passing a VAT collecting Bill which became law while Governor Nyesom Wike Assented to it.
But the FIRS challenged the judgment at the Court of Appeal.
Lagos State house of Assembly followed the Rivers route, passing the VAT collection Bill, Governor Babajide Sanwo-Olu assented to it.
Both states insisted the companies in their domains should pay VAT to them henceforth.
But the Court of Appeal ruled that parties should maintain the status quo.
Akwa Ibom State has already started the process of enacting a law like Rivers and Lagos states.
The VAT is shared at 15 per cent for Federal Government, 50 per cent to states and 30 per cent to local governments.
Last year, VAT generated N1.53 trillion into the consolidated revenue account.
