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FIRS Not Constitutionally Entitled To Collect VAT, PIT, Other Taxes In States – Court Ordered

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Federal Inland Revenue Service- Investorsking

The Federal High Court sitting in Port-Harcourt declared that the Rivers State Government is the legal body assigned to collect Valued Added Tax (VAT) and Personal Income Tax (PIT) in the state and not the Federal Inland Revenue Services(FIRS).

The court, presided over by Justice Stephen Dalyop Pam, barred the Federal Inland Revenue Service and the Attorney-General of the Federation, both first and second defendants in the suit, from collecting, demanding, threatening and intimidating residents of Rivers State to pay to FIRS, personnel income tax and Value Added Tax.

Justice Pam made the assertion while delivering judgement in suit No. FHC/PH/CS/149/2020, filed by the Attorney General for Rivers State(plaintiff), against the Federal Inland Revenue Service (first defendant) and the Attorney General of the Federation (second defendant).

The court, which granted all the eleven reliefs sought by the Rivers State government, stated that there was no constitutional basis for the FIRS to demand and collect VAT, Withholding Tax, Education Tax and Technology levy in Rivers State or any other state of the federation, being that the constitutional powers and competence of the Federal Government is limited to taxation of incomes, profits and capital gains which does not include VAT or any other species of sales, or levy other than those specifically mentioned in items 58 and 59 of the Exclusive Legislative List of the constitution.

The judge dismissed the preliminary objections filed by the defendants that the court lacks jurisdiction to hear the suit and that the case should be transferred to the Court of Appeal for interpretation.

Justice Pam, who also dismissed the objection raised by the defendants that the National Assembly ought to have been made a party in the suit, declared that the issues of taxes raised by the state government were issues of law that the court is constitutionally empowered to entertain.

He declared that after a diligent review of the issues raised by both the plaintiff and the defendants, the plaintiff had proven beyond doubt that it is entitled to all the eleven reliefs it sought in the suit.

The court agreed with the Rivers State government that it is the state and not FIRS that is constitutionally entitled to impose taxes enforceable or collectible in its territory of the nature of consumption or sales tax, VAT, education and other taxes or levies, other than the taxes and duties specifically reserved for the Federal Government by items 58 and 59 of Part 1 of the Second Schedule of the 1999 Constitution as amended.

Also, the court declared that the defendants are not constitutionally entitled to charge or impose levies, charges, or rates (under any guise or by whatever name called) on the residents of Rivers State and indeed any state of the federation.

Among the reliefs sought by the Rivers State government, is a declaration that the constitutional power of the Federal Government to impose taxes and duties is only limited to the items listed in items 58 and 59 of Part 1 of the second schedule of the 1999 Constitution as amended.

The Rivers State government had also urged the court to declare that, by virtue of the provisions of items 7 and 8 of Part II(Concurrent Legislative List) of the Second Schedule of the constitution, the power of the Federal Government to delegate the collection of taxes can only be exercised by the state government or other authority of the state and no other person.

The state government had further asked the court to declare that all statutory provisions made or purportedly made in the exercise of the legislative powers of the Federal Government, which contains provisions which are inconsistent with or in excess of the powers to impose tax and duties, as prescribed by items 58 and 59 of Part I of the Second Schedule of the 1999 constitution, or inconsistent of the power to delegate the duty of collection of taxes, as contained in items 7 and 8 of Part II of the Second Schedule of the constitution, are unconstitutional, null and void.

Lead counsel for the Rivers State government, Donald Chika Denwigwe (SAN), who spoke to journalists after the court session, explained that the case is all about the interpretation of the constitution as regards the authority of the Government at the state and federal levels to collect certain revenue particularly, VAT.

“So, during the determination of the matter, some issues of law were thrown up like, whether or not the case should be referred to the Court of Appeal for the determination of some issues.

“The court noted that the application is like asking the Federal High Court to transfer the entire case to the Court of Appeal. In which case, if the court so decides there will be nothing left to refer back to the Federal High Court as required by the constitution.”

According to the lawyer, the court refused that prayer and decided that the case was in its proper place before the Federal High Court and to determine it.

Speaking on the implication of the judgement, Denwigwe said it is now unlawful for such taxes as VAT in Rivers State to be collected by any agency of the Federal Government.

“In summary, it is a determination that it is wrong for the Federal government to be collecting taxes which are constitutionally reserved for the State governments to collect. The implication of the judgement is that the government (Federal and State) as an authority under the constitution, should be advised by the judgement that it is the duty of all government authorities to comply with and obey the law so long as the court has interpreted it and said what that law is.

“So, in other words, the issue of Value Added Tax (VAT) in the territory of Rivers State and Personal Income Tax should be reserved for the government of Rivers State.”

The Lawyer to FIRS, O.C. Eyibo said he will study the judgment and advise his client.

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Finance

FMAN Elects New Excos as Coronation Asset M.D, Aig-Imoukhuede Emerges as President

FMAN has elected the Managing Director of Coronation Asset Management Limited, Mr. Aigbovbioise Aig-Imoukhuede as the new President-elect of the association.

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Aigbovbioise Aig-Imoukhuede

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Finance

Fintech CEO: Rate Hikes & Inflation Spell Different Reality than Stock Market

Since its low in June, the S&P has seen a bump of 18%, while the NASDAQ has risen roughly 20%

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Since its low in June, the S&P has seen a bump of 18%, while the NASDAQ has risen roughly 20%. This week, both Morgan Stanley and BlackRock analysts have noted that the recent bounce likely won’t continue. One Fintech exec, who has been sounding the warning bells on the economy for the better part of the past year, speaks on the current state of affairs.

“As soon as we saw the trajectory of the pandemic-related spending bills, anybody with basic economic knowledge knew that inflation was going to be a concern. What most didn’t anticipate was the land war in Eastern Europe that only exacerbated energy costs and supply chain issues,” said Richard Gardner, CEO of Modulus, a US-based developer of ultra-high-performance trading and surveillance technology that powers global equities, derivatives, and digital asset exchanges.

“As inflation, which was nudged higher by pandemic-related supply chain shortages which still haven’t fully abated, began to affect household budgets, it was clear that rate hikes were coming. The 75 basis point hikes were historic, but all indicators show that additional increases will be necessary. The increases are only starting to ripple across the economy,” said Gardner.

“There was some excitement over July’s CPI, but the reality is that this economy isn’t back on track. The excitement and celebration is a bit too soon, and I think the fundamentals still show that. Given the market’s recent boon, I think you’re starting to see an influx of FOMO, and that’s not painting the full picture,” said Gardner.

Modulus is known throughout the financial technology segment as a leader in the development of ultra-high frequency trading systems and blockchain technologies. Modulus has provided its exchange solution to some of the industry’s most profitable digital asset exchanges, including a well-known multi-billion-dollar cryptocurrency exchange. Over the past twenty years, the company has built technology for the world’s most notable institutions, with a client list which includes NASA, NASDAQ, Goldman Sachs, Merrill Lynch, JP Morgan Chase, Bank of America, Barclays, Siemens, Shell, Yahoo!, Microsoft, Cornell University, and the University of Chicago.

“Right now could be a great time for companies to work on new projects and get them ready to bring to market. It is a great time for R&D, and, for the companies that planned for this economic upheaval, it is a time to poach top talent that find themselves laid-off. In particular, it is a great time for startups that just completed a major funding round. They’ll have the financial resources to weather the storm while competitors may begin to struggle with liquidity,” said Gardner.

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Banking Sector

FirstBank Commemorates 2022 International Youth Day, Dedicating the Week to Celebrating the Youth

First Bank of Nigeria Limited has announced its commemoration of the 2022 International Youth Day, globally celebrated today, 12 August 2022.

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FirstBank Headquarter - Investors King

First Bank of Nigeria Limited has announced its commemoration of the 2022 International Youth Day, globally celebrated today, 12 August 2022 and themed “Intergenerational solidarity: Creating a World for All Ages.” 

The International Youth Day is commemorated every year on 12 August, bringing youth issues to the attention of the international community and celebrating the potential of youth as partners in today’s global society. The Day also amplifies the message that action is needed across all generations to achieve the United Nations Sustainable Development Goals (SDGs) and leave no one behind.

Leading up to the day, the Bank dedicated the week of 8 – 12 August with a lineup of activities to reiterate its commitment to Youth Empowerment.

As a Bank renowned for its role in developing the economy through sustainable employment and entrepreneurship endeavours, the 2022 edition of the Youth Week will promote economic empowerment and employment, digital technology, and education as its focus during the celebration.

The Youth Week comprises various activities, including a Fashion illustration workshop, Design skill training, Gen Z/Millennial Webinar and many more exciting activities. These activities would give participants opportunities to win various exciting gift items.

Under the First@arts program, the Bank will empower the youths through Artistry Workshop Sessions & Arts Classes. Interested in the art of fashion design and illustrations, visit the Bank’s social media handles – Instagram: @firstbanknigeria, Facebook: First Bank of Nigeria Limited, Twitter: @FirstBankngr – for information on how you can be among 10 lucky winners to have the opportunity to learn the business of fashion at Claire Idera fashion studio.

Likewise, the Creative design workshop will enable youths design skill training; design thinking principles and their application in the context of layout, typefaces and colour. Interested youths can also participate on the FirstBank social media handles, where 25 lucky winners will be selected to learn the Art of Design at Geneza School of Designs.

Commemorating the Youth Week, Dr Adesola Adeduntan, Chief Executive Officer of FirstBank said: ‘’We remain committed to celebrating the younger demography whose voices, actions, vigour, and tireless participation in the political, economic, and social activities have continued to birth major contributions towards the sustainable development of Africa and the world at large. The planned activities will promote better collaboration and solidarity across generations to foster successful and equitable relationships, and partnerships thereby ensuring “no one is left behind” and empowering everyone to leverage their full potential toward achieving the much-desired Sustainable Development Goals (SDGs).

This Youth demography has a striking significance for us at FirstBank with the Millennials and Gen Zs constituting almost 60% of our workforce. This shows that youths are an integral part of our organisation and every country where we operate”, he concluded.

For more information and participation in the Youth Week, kindly visit the bank’s verified social media platforms; Instagram: @firstbanknigeria, Facebook: First Bank of Nigeria Limited, Twitter: @FirstBankngr

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