What We Know About The Court Of Appeal Ruling of Friday, September 10, Ordering That The Status Quo Ante Bellum Be Maintained


TAX TALK—Status Quo Ante Bellum means the state of affairs as existed previously.

The Court of Appeal ordered that the Status Quo Ante Bellum be maintained on the judgment of the Federal High Court on Rivers State vs. FIRS.

The FIRS applied for a stay of execution of this judgment.

The Court of Appeal did not hear the FIRS motion for stay of execution but ruled that before it hears that application, next week parties should not do anything that would give effect to the judgment of the Federal High Court.

The judgment of the Federal High Court sitting in Port Harcourt, Rivers State stays and the status quo ante bellum will remain till the Court of Appeal hears the FIRS’ application for stay of execution.


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Taxpayers will continue to make their VAT payments to the Federal Government as has always been the case.

The Appeal Court ruling restrains Rivers State Government, or any other state government from compelling businesses and residents of their state to pay VAT to it.

The final position on this matter, except appealed further to the Supreme Court, will be decided by the Court of Appeal at the end of hearing of the case.

YBTC NEWS earlier report the position of the Federal Inland Revenue Service (FIRS) that it has the backing of the Value Added Tax (VAT) Act to collect the tax.

Rivers State government is currently locked in a legal battle with the tax agency over the collection of VAT.


However, the Nigerian tax administration is modelled after our fiscal system. That is, the three major tiers of government: Federal Government, State Government, and Local Government have been saddled with the responsibility of collecting tax in Nigeria.

This is in conformity with the provisions of the first schedule to the Constitution of the Federal Republic of Nigeria, 1999 (as amended). The tax body at the federal level is the Federal Inland Revenue Service (FIRS), at the state level, we have the Board of Internal Revenue service of various states (SBIR) and the Local government also collects taxes through the committee set up within their powers.

The Federal Inland Revenue Service (FIRS) collects taxes that are paid by companies and Federal Capital Territory. It is their responsibility to ensure that all taxes collected are duly remitted to the Federal Government.


Examples of such tax collected by FIRS are: Companies income tax, withholding taxes on companies, petroleum profit tax, value added tax, stamp duties on corporate entities in the FCT, among others.


The State Board of Internal Revenue (SBIR) performs the responsibility of administering Personal Income Tax.

The SBIRs are responsible to the State government in terms of accounting and remitting these collected taxes to the coffers of the State government. Examples of such tax collected by SBIRs are: withholding taxes on individual, rent, consultancy/professional fees, technical services, stamp duties on individual and corporate entities in the state.


The Local government also collects taxes through the committee set up within their powers. They collect taxes, rates and fines posted under its jurisdiction and are responsible to the Local government chairman for all taxes collected.

Examples of such tax collected by the local government are: Shops and Kiosks rates, Tenement rates, Marriage, birth and death registration fees. Naming of street registration fees, excluding any street in the State Capital, Motor park levies among others. Meanwhile, it will interest you to know that apart from the above mentioned bodies of tax collectors, there is the Joint Tax Board at the center.

The board primarily contributes to the advancement of the tax administration in Nigeria, especially in the area of harmonization of Personal Income Tax administration throughout Nigeria.

The board came into existence by virtue of the provisions of section 86 (1) of the Personal Income Tax Act cap. P8 LFN 2004.


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