The Nation Newspaper

Tag: EVASION

  • Bayelsa govt decries tax evasion

    Bayelsa govt decries tax evasion

    Bayelsa State Board of Internal Revenue (BIR) yesterday decried tax evasion among corporate organisations.

    The Executive Chairman, Dr. Nimibofa Ayawei, told News Agency of Nigeria (NAN) in Yenagoa that this had resulted in poor internally generated revenue profile.

    He said the exponential growth of the internal revenue, which crossed the N1 billion mark in 2017, was achieved by hard work.

    Ayawei said the board had intensified its revenue drive and would enforce compliance of tax laws, to get more funds to complement oil revenue.

    “The board has begun aggressive tax enforcement and the results have reflected in our revenue profile.

    “But one major problem is the reluctant attitude of corporate organisations to meet their tax obligations.

    “We have had to use litigation to achieve the over N1 billion monthly revenue mark we achieved in 2017, which has affected and increased our cost of collection.

    “We have been compelled to obtain court orders to seal off organisations expected to remit Pay as You Earn (PAYE) tax to the state. They have always been uncooperative.

    “One case is the Niger Delta Development Commission (NDDC). In June 2017, we sealed off the building housing NDDC when the liability was N336 million.

    “Following stakeholders’ intervention, we unsealed the place and the agreement we reached was that NDDC would liquidate the debt in two tranches within two months.

    “The commission paid half of the sum, N168 million, leaving an outstanding of N168 million.

    “More than six months after we sealed off the place, it is sad that we were compelled again to go back on January 22 to shut the office. The place is still under lock and key,” he said.

    The executive chairman said the board would act ensure that companies operating in Bayelsa complied with tax laws, to boost the revenue profile.

    He said BIR officials were working to sensitise the public to change the negative attitude toward tax.

  • Lagos shuts 11 hotels over N354.75m tax evasion

    The Lagos State Internal Revenue Service (LIRS) yesterday shut 11 hotels, restaurants and event centres over alleged failures to remit their taxes under the hotel occupancy and restaurant consumption laws of Lagos State 2009.

    Director, Legal Services at LIRS, Seyi Alade, who spoke after a state-wide tax law enforcement exercise in Lagos, said the firms owed the state government N354.75 million in unpaid taxes.

    Alade the government had started full enforcement of all aspects of tax laws on defaulting taxpayers.

    He said failure to file annual tax returns, false declarations in returns filed and evasion of taxes were criminal offences punishable by severe fines and jail terms upon conviction by a court.

    “Any failure to deduct and remit taxes as and when due in Lagos State will now attract very serious monetary penalties.

    “These penalties include sealing of the company, seizure of the goods and chattels and criminal prosecution of principal officers of recalcitrant entities.

  • Nigeria loses over N15tr yearly to tax evasion

    About N15 trillion is lost yearly to tax evasion yearly, Partner, West Africa Tax Leader, PricewaterCoopers (PwC), Taiwo Oyedele, has said.

    According to him, what the country is losing by not paying taxes is better estimated using tax Gross Domestic Product (GDP) ratio, adding that the tax GDP ratio stands at about six per cent.

    All collections from taxes, according to him, stand below N7trillion.

    Speaking with The Nation in Lagos at the weekend, he said tax matter is a national issue all must embrace, adding that even though nobody likes to pay tax, it plays a major role in the economic development of any nation, including Nigeria.

    He however said  the problem was not the tax itself, but how the tax money was spent, adding: “After all many Nigerians travel to countries such as the United States, United Kingdom and they pay about 40 per cent tax and yet they don’t even complain because they can see the tax money at work.”

    He accused the leaders of not paying their own taxes as they should, this he said has given rise to people not showing the willingness to pay taxes.

    Oyedele said: “To be honest, government needs to start with itself; it is not moral for government to expect that people will pay tax if the people that are leading us are not paying, so let the president, vice president, senators, ministers, governors, deputy governors, let them start paying and when they finish paying let them publish it even if there is no law that says they should publish it but to show leadership exemplary let them publish what they pay.

    “If anybody has taken the time to screen the tax record of our leaders to ensure that they pay the right amount of tax and at the right time, and the amount of tax they pay is consistent with their life style more than 90 per cent of people we have in power today will not be there because they would have been disqualified.”

    He said money realised from taxes could be used to solve many problems facing the country including infrastructural deficit, but lamented that corruption, lack of transparency, bad leadership, and absence of citizens’ participation in government among others are the challenges facing the country.

    He advised Nigerians to start paying taxes and stop waiting until the government has fixed infrastructure such as roads, electricity, hospitals and others.

    “So, why we are holding the government to account and forcing it to do the right thing?  We must pay our taxes and then hold the government to do the right thing; we must pay our taxes, so the two must go hand in hand.

    “But I also don’t want the rest of us to wait until everybody in government and leadership start paying before we start paying, lets pay the little we can, and once we finish paying let us hold the government to account, he urged. We should also know that if we all stop paying taxes, the economy will collapse and I believe no Nigerian would want the economy to collapse,” Oyedele said.

    On why tax credit is the best option, Oyedele who described it as a fantastic arrangement necessitated by the inefficiency of government, lamenting that government spends more than it should spend on projects.

    He said the private sector is more efficient and result-oriented. According to him, the idea that private investors, such as Dangote and the Nigerian Liquefied Natural Gas (NLNG), would spend money to construct road projects should not be because the government should have done that with tax money.

  • Politics of padding and evasion

    Politics of padding and evasion

    Nobody from the legislative to the executive should be afraid of investigation of the issues raised by Jibrin who acknowledged his own participation in the act of padding

    If Nigerians were not the optimists they are, their country would have been raped to death by the venal and brazen men and a few women that find their way to political office in all forms and at all levels. When citizens are not being entertained by news of bureaucratic corruption, they are being embarrassed by reports of the tricks of budget making. If they are not being confused by the inordinate adjournment of cases of corruption involving top politicians and bureaucrats, they are being confounded by reports of display of omniscience by their leading lawmakers, to the extent that words imbued with value are emptied of the wholesomeness the word signifies.

    Although there are many “top lawyers’ in the National Assembly according to the Speaker, fortunately, there are other professionals: doctors, engineers, accountants, academics, all of whose disciplines do not allow them to see human actions as value-free, the way Speaker Dogara spoke of law in relation to allegation of padding after his recent visit to President Buhari. There may be a clear line between legality and morality, in most democracies in the Anglophone world in which there are more lawyers in their legislatures than we have in Nigeria, politicians are still expected to act in a way that shows that they have value for morality in public affairs.

    Still in the Anglophone world to which Nigeria was drafted by colonialism, to pad is a value-laden word. In communication in particular, padding means to add unwholesome, undesirable, superfluous, misleading matter to a material. Even the Webster dictionary has not outgrown the definition that to pad is a word that kicks against indiscipline: “to expand or increase with needless, misleading, or fraudulent matter.” So, padding of budget is not the opposite of what a backbencher in the Commons once warned fellow British MPs against, “rubber stamping tablets of stone handed down by the executive of the day.” It is legitimate for legislators to engage in pork barrel politics, as it is done in many other democracies. But in doing so, lawmakers are supposed to engage in lobbying fellow legislators and the executive to site projects in their constituencies, not for personal interest but for community growth and verifiable public good. Pork barrel politics does not include arranging for special constituency allowance to be managed by lawmakers; nor does it allow lawmakers engaged in scrutinising budget to insert their own pork barrel projects directly in the budget. This has to be settled with the executive before the budget is presented to the legislature before all representatives of the people.

    Padding may not be illegal in Nigerian jurisprudence, but it is offensive all the same.  A lawyer friend of mine told me that if a budget document sent by the president to the national assembly for approval benefited from added materials in the open during plenary session of the house and the added material got approved by the whole house after such open debate, such may not be a crime. However, any padding that takes place in camera or when many lawmakers are not within earshot, is not just unwholesome but patently criminal. The criminality of such addition is larger than uttering and forgery, it may also be treasonable, as it misrepresents the will of parliament, by presenting materials unknown to parliament as originating from parliament.

    However, it is too soon for anybody to talk about criminality in respect of allegations of padding until a thorough investigation is conducted to determine the sequence of events from President Buhari’s submission of the 2015 budget to the National Assembly to the point that the approved copy of the parliament was sent to the Clerk of the House and the final copy delivered to the president as approved copy from the House. The two documents that require rigorous scrutiny are the copy of the document sent to the clerk immediately after the approval and the copy of the budget that finally got to the president. It may not be just the lawmakers that Jibrin had described as agents of padding along with himself that need to be investigated, the bureaucracy of the house should be investigated, just as it was in the case of forgery of the Rules of the Senate. But attempts by top members of the ruling party to settle the matter as internal affairs of the party are not helpful in promoting politics of change. Nobody from the legislative to the executive should be afraid of investigation of the issues raised by Jibrin who acknowledged his own participation in the act of padding. Probing the allegations do not amount to attempts by the executive to intimidate the legislature; it may very well turn out to strengthen the legislature, once the facts of Jibrin’s allegations are laid bare for all to see.

    After thorough investigation by the police, EFCC, or ICPC, the allegations much touted by Jibrin may become just serve as an exercise of purification for all concerned, especially if nothing criminal is not established. The Yoruba saying: enitikoba se nnkanitofikiiboju wo ehinkule, (those who have not done anything that sparks suspicion need not look beyond their shoulders) is apt to assure those resisting investigation to remain calm, if they have nothing to feel uncomfortable about. What threatens to offend moral sensibility of citizens is the sudden polarization of the House into pro and anti-Dogara groups, especially claims by hundreds of legislators that Jibrin’s allegations are politically motivated. This kind of herd instinct by House members sounds similar to the response of senators to charges of perjury and forgery against the Senate President when senators gladly shut down the senate in order to accompany their president to court and the stridency of claims by senators loyal to Saraki and Ekweremadu that any allegation against the two is tantamount to an indictment of the senate as an institution. These are matters that should be of urgent concern to the new engineers of state from status quo to change.

    Sensitive and sensible citizens ought to get worried about the legislative culture of the country even in the post-Jonathan presidency that had been perceived as the epicenter of venality in governance. It is unfortunate that every time since beginning of this administration the fighters of corruption act right, something happens in the legislature to suggest that its principal members prefer to gravitate to the left on the moral spectrum. This development should worry patriotic or change-loving citizens. Worse still, public discourse is being reduced by the day to 9th grade level, especially by legislators who are eager to spin the narrative of executive persecution of the second branch of government anytime the former moves to invoke the principle of ethics and public morality, particularly in respect of members of the National Assembly.

    The Speaker has already announced that no institution has a right to probe the House because it has not done anything beyond its power to tinker with the budget: tinkering with the budget. In the last one year, citizens have been psychologically assaulted by incessant news of individual and institutional corruption, particularly during the preceding administration. Now that Jibrin has alerted the nation about acts of budget padding under the new administration and persons Jibrin has accused of padding have said unequivocally that there was no such thing, investigating the claims of accuser and accused will help reduce citizens’ anxiety, even if all the probe can achieve is to establish the innocence of those fingered in Jibrin’s claims. Doing this will go a long way to remove the perception (or misperception?) outside the houses of power—legislative and executive—that the country’s political leaders see governing Nigeria essentially as an enterprise to profit from, rather than as a service to perform in the interest of public good.

  • Govt loses $2bn to tax evasion by oil firms

    The Federal Government has lost about $2bn to oil companies  avoiding payment of compulsory fees, the House of Representatives ad hoc committee mandated to investigate all oil prospecting licenses (OPLs) and Oil Mining Leases (OMLs) granted by the Federal Government said yesterday.

    Chairman of the Ad Hoc committee,  Gideon Gwani, said the oil companies are owing the government hundreds of millions of dollars thus compounding the problem, when they should have been the ones helping to salvage the situation of the country by prompt payment of their taxes.

    He said the situation is alarming and worrisome, adding that “this is a dangerous trend that cannot be allowed to continue.”

  • Lagos shuts six firms over N32.17m tax evasion

    The Lagos State Internal Revenue Service (LIRS) has shut six companies for failure to remit a total of N32.17 million deducted as personal income tax of their employees to the state government.

    Head, Distrain Unit of LIRS, Mrs Ajibike Oshodi-Sholola, disclosed this while speaking in Lagos yesterday.

    Oshodi-Sholola said the companies were audited by LIRS between one and five years ago, but the companies had not been meeting their tax obligations to the state till date.

    She said the period of the tax liabilities of the companies were from 2009 to 2013, adding that the LIRS went to court and obtained an order to seal the companies since they refused to pay these taxes after many years of been audited.

    She said tax payment was a civic responsibility of everyone and that companies had no reason for not remitting taxes of workers to the government.

    According to her, the affected companies are into communication, security management, shipping and pharmaceutical, among others.

    Oshodi-Sholola, however, advised that companies could contest or object to tax liabilities given to them within time allowed for consideration by the service.

    She said the service usually gave 30 working days after the demand notice letter was issued for companies to contest or object to tax liabilities.

    According to her, large numbers of firms usually object or contest their liabilities after the time allowed.

    He said this was the reason the LIRS was not acting on their requests in most cases.

    “If a company thinks it is not contented with the liability given to it, it can contest it and the LIRS may amend the debt. But it is necessary they do that within the timeframe because if they contest after the given 30 working days, the LIRS tax enforcement team will still come to seal their companies,” she  told the News Agency of Nigeria (NAN). .

  • Stallion Group denies duty evasion allegation

    Stallion Group, a multi national company, has denied allegations of duty evasion on rice imports leveled against it.

    In a statement, the group said it has not committed any fraud or evaded any due obligations of import duties in 2014 as alleged.

    The statement reads: “Popular Farms and Mills Limited and Masco Agro Allied Industries Limited being subsidiaries of Stallion Group importedXYZ matric tonnes of rice, and fully paid a total duty and levies of N17 billion at the prevailing duty and levy rates as approved by Mr. President for millers under the new National Rice Policy contained in circular no. BD/FP/TT/50/1/99 of 8th July,2014.

    “Our rice production companies are contending that, legally, the retrospective duties being demanded by the Nigeria Customs Service are not payable and will adhere to any final judgment made by the country’s rule of law and due process.The rice companies have also issued a bond to secure Nigeria Customs from any potential proven obligation; therefore there is no question of any fraud or evasion. Our companies have not sought or received any “waivers” as misunderstood by some.

    “We are a law-abiding group with international operations in several countries that strictly comply with all applicable law, rules and regulations. Stallion will never evade or avoid any lawfully due obligations in any of its business transactions in any country.”

  • Eight held for ‘tax evasion’

    Eight held for ‘tax evasion’

    Officials of the Federal Inland Revenue Service (FIRS) have arrested eight management staff of companies in Ondo State for the non-payment of  company income tax and Value Added Tax (VAT) to the government.

    Some of the companies are owned by the state government; others are owned by corporate and private individuals.

    FIRS Head of Legal Affairs, Southwest, Daniel Onukun, said the state owes the Federal Government about N100million.

    According to him, the state-owned Owena Motels owed N44million. Other defaulting companies are BOMACK, Integrity Foams, Uwa and Bros and Adelak Hotels.

    Onukun said some of the management staff have signed undertaking to pay their debts installmentally.

    He said those who renege  would be prosecuted.

     

  • Fed Govt loses N80b to corporate tax evasion

    Fed Govt loses N80b to corporate tax evasion

    The Federal  Government is losing over N80 billion (or $500 million) monthly from registered companies that refuse to pay taxes.

    The Co-ordinating Minister for the Economy and Minister of Finance, Dr Ngozi Okonjo-Iweala, who disclosed this at the National Council for Finance and Economic Development (NACOFED) yesterday, said the Federal Government is recording this lose because about 75 per cent of the registered firms have refused to their taxes.

    She said about 65 per cent of registered taxpayers have not filed their tax returns in the past two years.

    Mrs Okonjo-Iweala lamented that following the worrisome decline in the oil revenues, additional money is urgently needed from other sources.

    She said the government reduced domestic borrowing from N852 billion in 2011, to N744 billion last year, and to N577 billion in  this year’s budget, adding that the government’s goal is to further reduce it in the 2014 budget.

    Mrs. Okonjo-Iweala said the government has also paid part of its domestic debts rather than rolling it over.  She said: “Beginning in February 2013, we retired N75 billion worth of maturing domestic bonds. We hope to continue this practice of retiring maturing bonds rather than rolling it over.”

    She said the government was working on establishing a sinking fund with an initial capitalisation of N25 billion, saying the funds will be used to retire maturing bond obligations.

    Also speaking at the event, Vice President Namadi Sambo, who was represented by the Minister of National Planning, Dr Shamsudden Usman, decried the high recurrent expenditure by the government. He explained that the government has initiated efforts to reduce waste and duplication in the functions of its agencies.

    He listed one of such efforts to include the ramping of efforts in the biometric verification of employees in all the agencies, adding that this trimmed recurrent expenditures from 71.5 per cent last year, to about 68.7 per cent of this yea’s budget.

    He said the capital vote was expected to increase to 31.3 per cent as a result of the measure.

     

  • Fresh campaign against tax evasion

    Fresh campaign against tax evasion

    Imagine this scenario:a young graduate, who lives off the wealthy sister, gets arrested for a traffic violation. The sister, a chief executive officer of a firm secures his release from custody. The young man abandons the sister’s home after helping himself to some of her hard currency.

    He then engages the services of a tout to secure a fake tax clearance certificate on the sister’s firm to bid for a contract in a Federal Government agency. Wondering why a company that has been compliant in tax payments would suddenly apply for a contract with a fake TCC, the FIRS investigates. The CEO of the firm is invited by the FIRS enforcement unit after the young man had been apprehended by the police.

    This captures the thrust of Born To Win, one of the 13 episodes in Binding Duty, produced by Ohi Alegbe and directed by Ihria Enakimio for the Federal Inland Revenue Services. The production of the TV drama is one of the new approaches to enlighten on the need for voluntary compliance among tax payers. Also, it must have been spurred by the low level of voluntary compliance by tax payers and the dire need by the services to shore up federal government’s dwindling revenue through taxation.

    One of the episodes, Short Cut, which focuses on how touts obtain fake tax clearance certificate from roadside printing press, shows how the FIRS is undergoing an in house cleansing exercise that identifies, investigates and sacks some staff members who connive with touts to subvert the system.

    Speaking at the screening of some of the episodes in Lagos, coordinating producers of the drama and an Assistant Director at FIRS, Mr Wahab Gbadamosi, said the project which started in 2008 is one of the subtle ways the services is adopting to cleanse the system while shoring up the revenue base of Federal Government.

    “The behavioural change is being pursued in the house and our clients are being focused for synergy. It is also an education platform that cuts across all strata of the society,” he said.

    According to another coordinating producer, Nneka Ifekwuna, the drama is preceded by in-house cleansing at the FIRS in order to effectively confront the challenges of enforcing compliance among tax payers. “We have to clean our table otherwise we will not be able to clean the nation,” she added.

    Other episodes of the drama include Burrowed time (focuses on unremitted VAT funds), To Have and to Hold (focuses on Withholding Tax proceeds), Ostrich Syndrome (focuses on tax arrears), and Double Jeopardy (focuses on personal income tax).

    According to Alegbe, the casts are returning to camp for shooting soon while the 13 episodes will run for 26 weeks.

    The efforts of the FIRS in this direction are worthwhile because no doubt, tax revenue collection remains critical to the growth and development of the country, as government alone cannot provide all the social amenities without contributions from the public. Also, it is high time the economy’s growth shifted from revenues from oil.

    Tina Mba, acted as Doorshima Jang; (FIRS Director). Other actors are Eric Obinna, Langley Evru and Tony Afokhai. Executive producers are Ifueko Omoigui-Okauru and Kabir M Mashi. Coordinating producers are Emmanuel Obeta, Wahab Gbadamosi and Nneka Ifekwuna. Director of photography is Abraham Adetutu while the Artistic director is Austin Awulonu.