Judgment has been reserved by the Supreme Court of Nigeria in the protracted tax dispute between the Federal Inland Revenue Service (FIRS) and the Bayelsa State Revenue Service, with a verdict now slated for July 27, 2026.
The decision followed arguments from counsel representing both parties before a five-member panel of the apex court presided over by Ibrahim Saulawa, who announced the adjournment after the adoption of final written briefs.
Representing the Federal Government, the Attorney-General of the Federation, Lateef Fagbemi (SAN), pressed the court to overturn the earlier rulings of the lower courts, insisting that due process was not followed by the Bayelsa State Government.
He argued that under the Personal Income Tax Act, disputes of this nature ought to originate before the Tax Appeal Tribunal, rather than the regular courts. He also faulted the reliance on documents introduced by a third party not formally recognised in the suit, describing it as a procedural flaw that undermined the integrity of the judgments.
Fagbemi further urged the court to rule that the disputed funds remain with the Federal Government and sought an order compelling the state to refund N3.6bn.
However, counsel to the Bayelsa State Government maintained that the dispute fundamentally concerns the legal authority to collect personal income tax. He told the court that findings from an audit conducted by the FIRS itself support the state’s claim to N5.5bn out of the N8.8bn in contention.
He noted that both the trial court and the appellate court had already affirmed the state’s entitlement, arguing that there was no basis for the apex court to disturb those concurrent findings.
On the issue of interest, the state’s counsel contended that Bayelsa could not be penalised for funds it never had custody of, while urging the court to dismiss the appeal in its entirety.
The case, marked SC/CV/472/2025, is expected to clarify longstanding questions around tax jurisdiction and revenue entitlements between federal and state authorities.
