Any company that fails to pay Value Added Tax to the Rivers state government will be sealed off.
The threat was issued by governor Nyesom Wike.
Wike told representatives of companies that the State had commenced full implementation of the new tax law and would begin to receive VAT from September 2021.
The Governor, at an interactive session with representatives of corporate organisations at the Banquet Hall, Government House, Port Harcourt on Wednesday, said the State would no longer tolerate defaulters.
He warned them against the antics deployed by the Federal Inland Revenue Service (FIRS) officials to use force to collect VAT from them.
Wike alleged FIRS collected VAT in the State with impunity, knowing it was unconstitutional for them to do so.
He said his administration challenged their impunity at the Federal High Court in Port Harcourt, which declared that the constitution was right in vesting powers to collect VAT in the state government within its jurisdiction.
He said: “When we challenged the Federal Government through the office of the Attorney-General and FIRS in court, do you know what they did? They wrote this letter dated 1st of July 2021. Remember, it was in 2020 that we filed this action against them. But see how corrupt this country is.
“Corruption is not only about kickbacks, it is also about doing something illegally. We were in court in 2020.Then on July 1st 2021, the chairman of FIRS wrote to the National Assembly through the office of the Deputy Speaker of the House of Representatives.
“He was asking them to amend the constitution and insert VAT under item 58 of the exclusive legislative list, when we were already challenging that it is not their responsibility to collect VAT. They knew that what they were doing was not the right thing.”
Wike stated that his responsibility in office included making sure that Rivers people were not denied their entitlements.
The Governor warned corporate organisations not to feign ignorance of the state VAT law.
“We are going to inaugurate the Tax Appeal Commission by Friday which will be headed by a retired judge of the state”, he said.
Wike described the disparity in the sharing of VAT proceeds describing it as an inexplicable form of injustice that weakens the performance states.
He said: “Let me tell you the injustice in this country. In the month of June 2021, which we shared in July, VAT collected in Rivers State was N15.1billion. What they gave us was N4.7billion. See the gross injustice and these money includes contracts awarded by the Rivers State Government.
“This is not an issue of party; it is the issues of infraction of the constitution, issues of illegality. Look at Lagos, it is not the same party with me. In the month of June 2021, the VAT collected in Lagos was N46.4 billion but see what Lagos got N9.3 billion.
“Have you seen the injustice in the country? VAT collected in Kano was N2. 8billion and they gave them N2. 8billion. Is there any justice in this country?”