Supreme Court Schedules July 27 for Ruling in Major Tax Dispute Between FIRS and Bayelsa State
The Supreme Court of Nigeria has officially fixed July 27, 2026, as the date for delivering judgment in a significant appeal filed by the Federal Inland Revenue Service (FIRS). This appeal challenges the concurrent decisions of both the Court of Appeal and the Federal High Court, which had previously ordered the payment of a substantial sum of N5.5 billion to the Bayelsa State Revenue Service. The funds in question are alleged to have been wrongly collected and withheld by the federal agency.
Legal Proceedings and Arguments Presented
A five-member panel of the apex court, presided over by Justice Ibrahim Saulawa, reserved judgment on Wednesday after all parties involved adopted their final written briefs. Representing the federal government, the Attorney-General of the Federation (AGF), Lateef Fagbemi, SAN, vigorously argued the appeal. He urged the Supreme Court to set aside the judgments of the lower courts and allow the appeal to proceed.
Fagbemi contended that Bayelsa State failed to adhere to the statutory provisions outlined in the Personal Income Tax Act. According to his argument, such tax disputes must first be determined by the Tax Appeal Tribunal before any recourse to the courts can be made. He emphasized that this procedural step was not followed, thereby invalidating the state's claims.
Furthermore, the AGF argued that the lower courts relied heavily on documentary evidence presented by a third party. This individual was neither joined in the suit nor called as a witness, which Fagbemi claimed resulted in a miscarriage of justice. He also maintained that the disputed funds should rightfully remain with the federal government and requested the court to order Bayelsa State to refund an additional N3.6 billion.
Bayelsa State's Defense and Counterarguments
In response, counsel for the Bayelsa State Government presented a robust defense, focusing on the core issue of authority to collect personal income tax. He cited an audit conducted by the FIRS itself, which allegedly confirmed that the N5.5 billion sum rightfully belongs to the state. The counsel informed the court that the total amount involved in the dispute is actually N8.8 billion, noting that both the trial court and the Court of Appeal had affirmed the state's entitlement to a portion of these funds.
The counsel argued that since the money is currently held in the custody of the federal government, it should deduct the acknowledged sum and remit the balance to Bayelsa State. He also pointed out that the state cannot be held liable for paying interest on funds it never possessed, urging the Supreme Court to dismiss the appeal and uphold the concurrent judgments of the lower courts.
Conclusion and Next Steps
Justice Saulawa, after hearing all arguments, consequently fixed July 27, 2026, for the judgment on the appeal, which is formally marked as SC/CV/472/2025. This case highlights ongoing tensions between federal and state authorities over tax collection and revenue allocation, with significant financial implications for both parties involved.
