So Who Do I Pay My VAT To?

Recent judicial pronouncements on which level of government is constitutionally empowered to levy and collect Value Added Tax (VAT), and subsequent legislation by the Rivers and Lagos State Governments may have created a compliance nightmare for Nigerian businesses. Business are likely to witness an avalanche of demand notices from competing tax authorities, each of of whom is claiming the right to impose VAT. We have identified the facts and legal position on this issue below, as well as what each tax payer needs to know.

What we know

• The Federal High Court (FHC) declared that VAT imposed by the Federal Government is unconstitutional, and restrained the Federal Inland Revenue Service (FIRS) from levying or collecting VAT (the "Judgment").