10 things to note about the new Rivers State VAT law

Below are the highlights of the new VAT enacted by the Rivers State government. 

1. The Rivers State Value Added Tax Law 2021 was signed into law on 19 August 2021 by Governor Nyesom Ezenwo Wike
2. The tax is to be administered by the Rivers State Internal Revenue Service (RSIRS)
3. The rate of the tax is 7.5%
4. Section 16(2) requires an importer of taxable goods to pay the tax on the goods to the state before clearing the goods (it is not clear how this will be implemented)
5. Taxable persons are to register for the tax within 6 months of the commencement of the law or 6 months of commencement of business whichever is earlier. This means businesses which have been in business for at least 6 months are to register immediately while new businesses have up to 18 February 2022 to register. Note that it is illegal to charge the tax without registration.
6. Based on section 9, nonresidents are to register for the tax if they carry on business in the state
7. Monthly remittance and return is due by the 21st of the succeeding month in a manner specified by the RSIRS. This means the first return under the law will become due by 21st of September 2021
8. Any appeal against the decision of the RSIRS should be to the Tax Appeal Commission and subsequently to the State High Court. However, the Tax Appeal Commission has not been established.
9. The VAT revenue is to be shared 70% to the State and 30% to the Local Governments. 
10. The list of exempt items is similar to the old national VAT law including basic food items, medical services and educational materials. There is no registration exemption for small businesses unlike the N25m exemption under the national VAT Act

It is expected that Rivers State will no longer be entitled to a share of the national VAT pool.

Download Rivers State Value Added Tax Law NO.4 OF 2021