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Tag: Tax evasion

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

    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.

    Mrs Ajibike Oshodi-Sholola, the Head, Distrain Unit of LIRS, disclosed this while speaking with the News Agency of Nigeria (NAN) in Lagos on Wednesday.

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

    She said that the period of the tax liabilities of the companies were from 2009 to 2013.

    She said that 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 that 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 that 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 they are not contented with the liability given to them, they can contest it and the LIRS may amend the debt.

    “But it is necessary they do that within the time frame because if they contest after the given 30 working days, the LIRS tax enforcement team will still come to seal their companies,” she said.

  • Tax evasion: FIRS to probe firms operating with NNPC

    Tax evasion: FIRS to probe firms operating with NNPC

    All companies operating operating with the Nigerian National Petroleum Corporation  (NNPC) are to be subjected to tax examination by the Federal Inland Revenue Service  (FIRS), it emerged yesterday.

    This followed the discovery during on-going House of Representatives investigation into crude for refined product exchange arrangement (oil  swap) of the NNPC that most companies operating with the NNPC do not have tax returns records with the FIRS.

    FIRS had told the Committee that following its directives, Duke Oil Global Investment refused to furnish it with tax returns.

    Duke Oil’s Managing Director Abdulkadir Seidu said the letter writen to his office was not addressed to his company.

    Invariably, the Committee asked for verification of  names and location of all compnaies in the name of Duke Oil.

    In response to questions, FIRS Coordinating Director (Domestic Taxes group), Babatunde Ajayi said a trading firm involved in the NNPC oil swap arrangement, Trafigura Nigeria Ltd has not filed any tax returns with the agency despite engaging in oil transactions in Nigeria.

    Under the swap programme, Trafigura has lifted about 12 million metric tonnes.

    Representative of the non-resident company, James Juslin had earlier during the investigative hearing, said the firm has no tax obligations to Nigeria being an international company.

  • Tax Evasion: Lagos seals six companies

    Tax Evasion: Lagos seals six companies

    The Lagos State Internal Revenue Service (LIRS) on Thursday sealed up six companies for non remittance of taxes due to the state government totaling over N50million.

    The defaulting companies (Nicon Town Management Company with a tax liability of N36,053,652.89, Marketing Mix and Company Limited with a liability of N10,712,914.15, Hope Valley International Clinic with a liability of 2,389,885.28, BEC Consultants Nigeria Limited with a tax liability of N792,563.47, Goldmine Global Services Limited owing N505,812.73 and Brown Brommel Limited with a liability of N368,159.63) owed the Lagos State Government money for periods ranging from one to five years (2007 to 2012).

    A statement signed by the Executive Chairman of LIRS, Mr. Olufolarin Ogunsanwo, said the companies were sealed in pursuant to the provisions of Section 104 of the Personal Income Tax Act 2004 LFN (as amended in 2011) and will not be re-opened for business until all unremitted taxes are paid to the State Government.

    He also warned defaulting companies, especially employers of labour that the State Governor, Mr. Akinwunmi  Ambode has zero tolerance for tax evasion, adding that LIRS is set to begin criminal prosecution of all tax defaulters in Lagos State to ensure that culprits are made to face the full wrath of the law.

    The LIRS boss said that under the Personal Income Tax Act, a taxable person is statutorily required to file a return of income for the preceding year at the expiration of 90 days from the commencement of every year of assessment, whilst any employer of labour is required to file all emoluments paid to its employees for the preceding year, not later than 31st of January each year.

    “In addition to that, employers will also be required to furnish the LIRS with the salary projection of all staff for the current year. The implication of which is that a taxable person or corporate organisations who have not filed their tax returns with LIRS by the stipulated date is in breach of the provisions of the law, which is a criminal offence that is punishable under the tax laws,” he said.

    He listed such infractions to include, non deduction of taxes (PAYE, Withholding tax etc), non remittance of PAYE taxes deducted from employees, non deduction/remittance of taxes by casual workers, non-filing of tax returns at the stipulated statutory period, under declaration of income, concealment of relevant information (Income, fringe benefits etc) with a view to evading tax, failure to process Electronic Tax Clearance Certificate (e-TCC) cards for employees as a result of non remittance of tax deducted from their emoluments.

    Ogunsanwo explained that the LIRS has spent the last ten years on advocacy, publicity and enlightenment programmes on the statutory obligations of the citizenry to voluntarily comply by paying their taxes promptly as prescribed in the constitution of the country and the applicable tax legislations, but in spite of the efforts, many corporate organisations and individuals still engage in several infractions.

    He however thanked those who have continued to express their unalloyed support to the Lagos State Government by performing their civic duties; stressing that these voluntarily compliant taxpayers are seen as partners in progress, who through the prompt payment of their taxes  empower the State Governor, Mr Akinwunmi Ambode to actualize his developmental agenda of infrastructural renewal, sustainable, habitable and safe environment, multimodal transportation network, qualitative healthcare, education, agricultural development and an investment friendly environment amongst others.

    He said the law is clear on issues bordering on tax evasion just as he reiterated that the LIRS will continue to take full advantage of the provisions of the law to prosecute recalcitrant corporate organisations and individuals without further notice.

  • Fayose vows to shut four banks for ‘tax evasion’

    Fayose vows to shut four banks for ‘tax evasion’

    •Locks out civil servants for lateness

    Ekiti State Governor Ayo Fayose has threatened to close four commercial banks for alleged refusal to pay taxes running into several millions of naira.

    The governor, who spoke yesterday at a meeting with retirees in Ado Ekiti, the capital, said he obtained a court order to shut the banks.

    Fayose, who accused the banks of shortchanging the government despite making profits, said it would not be business as usual, adding that he would not allow banks and other corporate organisations to defraud the state.

    He warned the banks and organisations owing taxes and levies to pay or risk being closed.

    Fayose stressed that he would compel private nursery, primary and secondary schools to pay the newly-imposed taxes before resumption.

    Each private school is expected to pay N150,000.

    Anybody who buys one cow to be slaughtered for any ceremony will pay N1,000.

    The governor told the pensioners that he was targeting haulage vehicles passing through the state, as taxes would be imposed on them to generate revenue.

    He urged them to be patient, saying he was battling with the debt incurred by the last administration. He promised to meet their demands as soon as the financial situation improved.

    Fayose caught hundreds of civil servants by surprise when he visited the secretariat unannounced.

    The governor, who arrived at 8am, ordered that the main gate be locked.

    Fayose, sporting a black suit over sky blue shirt and black trousers, stood on the road leading to the secretariat.

    He ordered his aides and the Head of Service, Dr. Gbenga Faseluka, to take a headcount of those who had resumed, promising to punish latecomers.

    Erring female civil servants went on their knees, begging the governor, while their male colleagues prostrated.

    Fayose said it would not be business as usual for the civil servants, whom he insisted must work for their salaries, as there were many unemployed graduates roaming the streets.

    He said: “If a labourer is worth his wages, the employer is also worth his services. I have warned workers against late coming and trifling with their jobs. Despite the paucity of funds, we pay civil servants regularly.

    “If workers are paid regularly, they must justify our efforts and work for the money they earn. There are many people looking for jobs. I want to surprise the workers. I will visit a lot of places.

    “It will be a continuous exercise. Those not disciplined and not ready to key into our policy of taking the state to a greater height will be shown the way out.”

    Dr. Faseluka said since punctuality was the soul of business, workers must be hardworking and shun lateness.

    He said: “It is a consummation of what we have been doing concerning punctuality on the part of the workers. For the past few weeks, we have been emphasising this.

    “It is time to instil discipline and we have to sanction the erring workers. When you issue circulars, pleas and some people are recalcitrant, you have to sanction them.”

  • Lagos seals six firms for N6.2m tax evasion

    The Lagos Inland Revenue Service (LIRS) has sealed six firms for failing to remit N6.197 million Personal Income Tax of their workers to the state government.

    Mrs Ajibike Oshodi-Sholola, Head of the Distain Unit of LIRS, told the News Agency of Nigeria (NAN) in Lagos, that the companies were sealed during a state-wide tax law enforcement exercise

    Oshodi-Sholola, who led the enforcement team, said that the affected companies’ tax liabilities were between 12 months and four years.

    Oshodi-Sholola said most corporate organisations usually evade the remittance of the previous year’s tax only to remit taxes of current years, adding that the six companies’ tax debts were basically for 2011 tax-audit year.

    According to her, some companies think that jumping the previous years’ tax to pay off the current year tax will make the LIRS exempt them from paying the outstanding debts.

    “It is very wrong to overlook tax payment of any certain year and a misconception to think that government will forfeit tax payment of any registered organisation in the state.

    “Despite how long the tax of an organisation has lingered, the truth remains that the government will someday come for it,” she said.

    The team leader noted that the enforcement would continue until Nigerians imbibed the culture of voluntary tax compliance, adding that tax evasion was a criminal act.

    According to her, the companies that were affected by the recent tax enforcement include; pharmaceutical companies, a security management company, paint manufacturing firms and a media company.

    Oshodi-Sholola urged companies operating in the state to ensure that their tax files and documents are always up-to-date to avoid been shut by the LIRS.

    She said the poor administration and compliance to taxation system had resulted to low generation of revenue from tax.

    According to her, the poor taxation system was responsible for the poor maintenance of the nations’ infrastructures.

    “In western countries where everything is taxable, tax is government’s key source of income. The government can still streamline Nigerian taxation system to make it more rewarding.

    “I believe that effective taxation will boost government’s revenue and that is the only way the nation’s infrastructures can be maintained and sustained,” she added.

    Meanwhile, some of the affected companies complained of not being given notification by the state government before coming to shut down their firms.

     

  • Tax evasion: ICPC, NASS probe construction firm, 114 others

    Senators and members of the House of Representatives under the auspices of Anti-Money Laundering and Cyber Security Coalition (AMLCSC) are working with the Independent Corrupt Practices and other related offences Commission (ICPC), to prosecute about 115 tax offenders.

    The Chairman of the Senate Committee on Pensions, Senator Aloysius Etok, said at a press briefing that the Senate in the course of investigations found that about “50 contracting firms working with Federal Ministry of Works operate with forged tax certificates.”

    He said companies that might come under the hammer of the National Assembly for tax evasion amounting to billions of naira, included Arab Contractors, a road construction firm, Septa Energy, Tower Aluminum, B. Stabilini and 112 others.

    Etok disclosed that the National Assembly was pushing for the prosecution of companies with high rate of casualised workers and fraudulent expatriate quota practices by foreign construction and some oil and gas companies in the country.

    According to the senator, if this trend of tax evasion continues agencies like Universal Basic Education Commission (UBEC), Tertiary Education Trust Fund (TETFUND), Niger Delta Development Commission (NDDC), would fold up, as according to him, the agencies depended on taxes for survival.

  • Forlan denies tax evasion claims

    Forlan denies tax evasion claims

    Diego Forlan insists he has nothing to hide after being named in a tax evasion investigation.

    Uruguay international Diego Forlan has distanced himself from an investigation into tax evasion involving HSBC bank.

    Cerezo Osaka striker Forlan is one of a number of notable figures named by the International Consortium of Investigative Journalists as having been helped by the bank to dodge tax payments.

    The report’s file on Forlan says he joined HSBC in 2006 while playing for Villarreal and was connected to two client accounts that together listed four bank accounts, holding as much as $1.4million in 2006-07.

    Forlan did not respond to the investigation’s initial request for comment, but subsequently released a statement via his own website.

    “I want to clarify that my finances are, and have always been, in order, in a way that complies with all the tax laws of the different places in which I have worked, lived and have assets,” he said.

    “I affirm that I am not part of this alleged research and that my name was simply used as a ‘hook’ to be a public figure who is recognised worldwide.”

    Other sports personalities to be named in the report include Fernando Alonso, Flavio Briatore, Marat Safin and Valentino Rossi.

  • Three arrested for ‘tax evasion’

    The Federal Inland Revenue  Service (FIRS) has sealed the College of Education, Ikere-Ekiti, Ekiti State, for allegedly failing to remit N6.7 million tax arrears.

    The agency, which stormed the college with armed policemen, arrested the Provost, Prof. Francesca Aladejana, Registrar Gbenga Ojo and Bursar Kayode Ige.

    The provost was not around when the enforcement team arrived but her arrival sparked an argument with the FIRS team, which insisted that she must go with them to make some clarifications.

    She begged the enforcement team that the institution would pay the arrears but her explanation fell on deaf ears and she was whisked away alongside the two other officers.

    Ekiti FIRS boss Gbenga Adegoke said the officials were taken away to extract a promise from them that the tax arrears would be paid.

    Adegoke said: “We came here because of the arrears of value added tax and withholding tax that the institution owes us.

    “The assessment period is between 2002 and 2007. The reconciliation was done around May 2008. It was about N12million.

    “Since then, the institution only paid over N5 million. The outstanding is N6.7 million.

    “We made a lot of entreaties and persuasions, we monitored them, on several occasions we saw the provost, the bursar and the registrar. All our entreaties fell on deaf ears. That is why we are here.

    “If they make the commitment and it is not fulfilled, we may be tempted to refer it to our legal and prosecution unit. They may likely face prosecution if they failed to pay the outstanding.”

  • Lagos prosecutes 50 firms for ‘tax evasion’

    Lagos prosecutes 50 firms for ‘tax evasion’

    The Lagos State government has said over 50 companies have been taken to court for alleged tax evasion.

    The Chairman, State Internal Revenue Services (LIRS), Tunde Fowler, warned erring organisations to comply and avoid prosecution.

    He said LIRS was carrying out a tax audit on many multinational and local companies to establish their tax liabilities.

    Fowler said the tax audit showed that some companies were defaulting and have not fully remitted the Pay As You Earn (PAYE) taxes of their employees to the government.

    He lamented that companies, such as Huawei Technologies Company Nigeria Limited owed the government N988 million as against the N212 million it paid to the government last year.

    The LIRS Chairman said: “LIRS has begun investigating Huawei Technologies Company Nigeria Limited.

    “We have told the firm to give certain information, including its monthly immigration reports, which every company which has expatriates must provide.

    “We are still discussing with the company on its last year’s tax file, if in the next one or two months it is not resolved, then those cases will go to court.”

    He added that several letters had been sent to the company to comply with the tax law, adding that LIRS would look into all the documents sent to it by Huawei Technologies Company Nigeria Limited.

    “When companies do not provide information on time, we write letters to inform them that we will proceed on a legal action against such company.

    “You may ask us how we got to N988million; we have what we call industry average rate.

    “Based on the number of expatriates that the company said it has here, it has 901 expatriates and we looked at the industry that it is in we take an average pay of what those workers earn in other companies.”

    Fowler added that LIRS was verifying the basis of the company’s objection, adding that the government, if not satisfied with records provided by the company, may be forced to court.

  • Tax evasion: Law court to the rescue

    Tax evasion: Law court to the rescue

    Federal Inland Revenue Services (FIRS) ups the ante on tax recovery via courts. A new regime of judicial activism and exercise of legal powers is at work in Nigeria as federal law bodies take on recalcitrant taxpayers, reports Assistant Editor Nduka Chiejina

    THE law holds the aces. This appears to be the conviction of the management and board of the Federal Inland Revenue Services (FIRS) in its quest to get as many corporate bodies into the tax net.

    Interestingly, things seem to be working in FIRS’ favour.

    Law court to the rescue

    Recently, it was reported that the Federal Inland Revenue Services (FIRS) has received a court order to seal the Ewekoro Power Plant (EPP), located in Lagos,  for failure to pay its outstanding tax liabilities totalling N114 million.

    Mr. Wahab Gbadamosi, Head, Communications and Liaison Department, said a Federal High Court, sitting in Abeokuta, Ogun State handed down the order following “a suit by the Federal Inland Revenue Service, (FIRS) and a prayer that a bench warrant be issued by the Federal High Court, for the arrest of the key officials of the company who evaded arrest.”

    According to Gbadamosi, “the court gave the order after series of adjournments occasioned by the refusal of the company’s officials to appear in court in the case brought against it by the Service.”

    The seal-up exercise, he said, “was carried out by the court bailiffs, with a combined team of the FIRS officials and officers of the Lagos State Police Command.”

    Earlier, the FIRS, he said, “had approached the court to compel the company to meet its tax obligations but the company neither appeared nor was represented in the court prompting multiple adjournments.”

    According to the FIRS spokesman, “dissatisfied with the company`s conduct, the court issued a bench warrant to compel appearance which the officials of the company equally evaded necessitating the sealing of the company’s premises.”

    Justice P.F. Olayiwola was said to have then ruled on FIRS motion on notice “that an order for interim forfeiture of property of corporate head office of Ewekoro Power Plant situate at Victoria House, 35/37, Isheri Road, Aguda Ogba area, Ikeja, Lagos State, pending final liquidation of the tax liability of about N114,000,000 (One hundred and fourteen million naira) only is herby granted.

    That an order for interim forfeiture of property of Ewekoro Power Plant situate at 3rd floor, Topaz floor, All Seasons Plaza, 24 Lateef Jakande Road, Agidingbi, Ikeja, Lagos State pending final liquidation of the tax liability of N114,000,000 (One hundred and fourteen million naira) only is hereby granted.”

    The water was first tested when Peniel Apartments Limited decided to challenge Section 31 of the Federal Inland Revenue Service (FIRS) powers to appoint an agent for the purposes of tax recovery. It was one test though that the property cum hospitality concern didn’t bargain for.

    Section 31 (1 to 3) of the FIRS Establishment Act 2007 states: “The Service may by notice in writing appoint any person to be the agent of a taxable person if the circumstances provide in sub-section (2) of this section makes it expedient to do so. The agent appointed under sub-section (1) of this section may be required to pay any tax payable by the taxable person from any money which may be held by the agent of the taxable person. Where the agent referred to in sub-section (2) of this section defaults, the tax shall recovered from him.’’

    Notwithstanding this express provision on the powers of the Service, Peniel Apartments Limited asked a Federal High Court to challenge the FIRS decision to appoint an agent to recover Paniel Apartments outstanding tax liabilities.

    The Federal High Court Sitting in Lagos on hearing both parties ordered Peniel Apartments Limited, to pay more than N89.2 million as tax liabilities to the Federal Inland Revenue Service (FIRS).

    Delivering judgment in the case brought by Peniel Apartments against the FIRS, Justice Musa Kurya said that the Service’s action under the law was valid and in accordance with the provisions of the relevant status.

    Peniel Apartments Limited had through an originating motion filed on September 27, 2013 challenged FIRS’ decision of appointing Standard Chartered Bank of Nigeria Limited as an agent of the company (Peniel Apartments Limited) for the recovery of the outstanding tax liabilities of N89, 268, 346:50.

    The tax liabilities comprised of Companies Income Tax of N44, 212, 344:73 for 2002 to 2012, Value Added Tax of N32, 605, 819:78 for 2005 to 2009, Education Tax of N10, 472, 351:52 for 2007 to 2011 and Withholding Tax of N1, 977, 830:47 for 2005 to 2009.

    After due consideration of the arguments from both parties, Kurya ruled that “from the foregoing, I am of the view that the applicants’ application fails for lack of merit and it is hereby struck out. “Consequently, judgment is hereby entered in favour of the second respondent (Standard Charted Bank of Nigeria Limited) against the Applicants. It is hereby also declared that the 1st Respondent (FIRS) action under the law is valid and in accordance with the provisions of the law. The whole Applicant is hereby struck out with no cost.”

    Peniel Apartments also challenged the Acting Executive Chairman of FIRS, Alhaji Kabir Mashi’s, powers to issue the recovery letter dated August 12, 2013 alleging that the company refused to pay the agreed liabilities.

    The company, pursuant to Order 34, Rule 5 (1) of the Federal High Court (Civil Procedure) Rules 2009 and section 77(2) (C) of the Companies Income Tax Act (CITA) C21 LFN 2004 prayed the court for the following: “To declare the decision of the FIRS as contained in the cited Ag. Chairman FIRS’s letter of appointment of the bank as the agent for recovery of the tax liabilities of the company as “usurpation of the power of the Board of 1st Respondent, is ultra vires, null and void ab initio and of no effect whatsoever.”

    For an Order to “remove for the purpose of being quashed and quashing the decision’’ contained in the FIRS’s letter of 12th August, 2013.

    For an Order of injunction restraining the FIRS and the Bank “whether by themselves, their servants and/or agents from implementing or further implementing or giving any effect or further effect whatsoever’’ to the FIRS’s decision as contained in the letter dated 12th August 2013.

    In the alternative to the second prayer, an Order “setting aside the said decision’’ of the FIRS “of 12th August 2013 Ref No. FIRS/TISED/DESPU/PA/074N, purportedly appointing the second Respondent as collecting Agent for the purpose of recovering the outstanding liabilities of the Applicant pursuant to Section 49 of the Companies Income Tax Act, Cap C21, Laws of the Federation of Nigeria, 2004’’ and for other orders the court may deem to make in the circumstance of the case.

    The tax agency on its part, filed a counter affidavit, a written address to the effect that Section 31 of the Federal Inland Revenue Service Establishment Act, 2007 empowers the Acting Executive Chairman of FIRS to appoint any person as an agent of a taxable person to pay any tax payable by the taxable person.

    It posited that Section 31 of the FIRS Act provides an avenue for an aggrieved party to ventilate grievances in tax disputes of which the applicant has not explored and exhausted the option before heading for the Federal High court.

    The Service maintained that the Respondent formulated only one issue for determination by the court, that is, “whether the Acting Chairman has acted within his power under the Federal Inland Revenue Service Act’’ which he answered in the affirmative relying on the Judgment of Justice I.N Buba, delivered on March 3, 2013 in suit No FHC/L/CS/630/2013, NNPC Vs. TAT and 3 others.

    Interestingly, the court in determining the matter found from the oral submissions and written processes of the parties “the Applicant owing as they have not paid their taxes. The first Respondent as the Acting Executive Chairman has the responsibility of executing the policy and administering the CITA, VAT and the Federal Inland Revenue Service Act. That the Acting Executive Chairman, Federal Inland Revenue Service letter dated August 12, 2013 was written when it became obvious that the Applicant has neglected, failed and or refused to pay the reconciled and agreed liabilities for many years. That by the written letter dated August 12, 2013 Acting Executive Chairman was not acting ultra vires his powers.’’

    From the proceedings, it has become obvious that the powers of the FIRS being exercised through the Executive Chairman or the Acting Executive Chairman of the Service which is a Judicial Precedent was exercised rightly.

    The FIRS relying on this decision believes that it would serve as a guide on the particular status to rely on and in FIRS correspondences to taxpayers and other stakeholders for future exercise of the Power of Substitution seeing that the FIRS Act, 2007 provides for the administering of the other tax laws including CITA.

    Importantly too, the decision of the court is expected to bring positive developments to the nation’s tax laws, its entire tax administration and the tax case laws.

    The FIRS is not only focusing on prosecution of cases but had ratcheted up the ante in tax investigations and enforcement of taxes that are due to the Federation.

    This was evident after several notifications and meetings recently, the FIRS peered into the operations of a steel group: PARCO Enterprises, over its refusal to open its books to and provide FIRS with requested documents for tax audit. Deploying some of its latest audit tools to identify tax evaders, officers of the FIRS, carried out enforcement on the company.

    One of such audit tools is the risk engine tool for identification of tax evaders or non-compliant taxpayers. Companies flagged by such tools are either subject to tax audit or tax investigation.

    One of such companies flagged off by the FIRS risk engine is Parco Enterprises, Nigeria Limited, with associated interests and companies in steel, fertilizer, chemicals, foundries and mines, with a trans-Nigerian reach.

    In line with its statutory mandate and the provisions of Sections 58 and 60 of the Companies Income Tax Act (Cap. 21 LFN 2004) and Sections 26 and 27 of the Federal Inland Revenue Service (Establishment) Act 2007 (FIRSEA), FIRS commenced investigation via a letter dated 22 April 2014 requesting for a pre-audit meeting which held on April 30, 2014.

    Further requests to provide accounting and other business records requested of them repeatedly by FIRS, in June were not granted. Consequently, the FIRS Management pursuant to the powers vested on it by Section 36 of the FIRSEA approved an enforcement action as a result of the company’s failure to oblige FIRS with requested documents and to open up its books for audit.

    The enforcement exercise was carried out by FIRS recently at the office of the company at 1, Commercial Road, Eleganza Plaza, Apapa, Lagos State where documents and accounting records of the company were retrieved for audit purposes.

    Recently also, the FIRS carried out a Tax collection enforcement exercise in Abuja on the A Group Properties Limited for failing to meet its tax obligations. During the exercise, the Chief Security Officer of the company was arrested for preventing officials of the tax agency from gaining entry in to the business premises of the company.

    Officials of the FIRS authority made the arrest after several notices were served on the company for failure to file returns as required by relevant tax laws.

    Those quizzed include the Admin Manager of the company and the Chief Security Officer of the Company while the company’s Auditor was invited over for questioning.

    The FIRS team, alleged that the Service served three notices on the company, on March 16, 2013, July 25, 2013 and the last notice on February 12, 2014 without response.

    The tax agency noted that the Group has about six related companies and that four of the companies are registered with the Service but without fulfilling their tax obligations. Two of the companies were yet to have any records with the FIRS and she alleged that those with records have grossly understated their turnover and Value Added Tax (VAT) deductions.

    The enforcement exercises on Parco Enterprises, A Class Properties testify to the renewed determination of the FIRS to improve tax revenue collection with a special focus on the non-oil revenue sources.

    Also, the FIRS secured a judgment debt of N1.82 billion against Air Nigeria Development Ltd. The judgment debt followed an order of the Federal High Court sitting in Lagos which directed the Air Nigeria Development Ltd to pay more than N1.82 billion as tax liabilities to the service.

    Delivering judgment in the case brought by the FIRS, Justice Musa Kurya said that the facts deposed in the affidavit to support the claim by the service was neither “Controversial nor contradicted.”

    The service had through the writ of summons, brought under the undefended list supported by a 41 paragraph affidavit deposed by Apena Kolawole, a staff of the FIRS, prayed the court to order Air Nigeria to pay the outstanding tax liabilities.

    Tax refund

    The Lagos Division of the Tax Appeal Tribunal (TAT) recently dismissed an appeal filed by the Botro Marine and Oil Services Limited (BMOSL) seeking the refund of more than N135, 39 million against the Federal Inland Revenue Service (FIRS).

    Ruling on the appeal, the TAT presided by its Chairman, Mr. Kayode Sofola (SAN), said the BMOSL failed to provide sufficient documentary evidence to demonstrate the over payment of their tax liabilities.

    The BMOSL, an oil servicing company was audited and assessed to tax, with a demand on them to pay their outstanding tax liabilities. But, aggrieved by the FIRS assessment and demand notices, BMOSL filed an appeal claiming to have overpaid taxes to the sum of N24, 146, 299 and 654, 406.35 dollars (N111, 249, 079.5).

    Sofola delivery ruling on the matter said: “We have carefully studied and analysed all the submissions of both parties on the issues raised and the reliefs sought by the appellant. As a result of our consideration of the issues, we hereby dismiss the appeal on the grounds that the appellant has failed to provide any relevant documentary evidence to justify the claimed refund of N24, 146, 299:00 (Twenty-Four Million, One Hundred and Forty Six Thousand, Two Hundred and Ninety-Nine Naira). While the other refund of $654, 406:35 (Six Hundred and Fifty-Four Thousand, Four Hundred and Six Dollars, Thirty-Five Cents) sought by the appellant has been granted by the respondent, as shown in Exhibit 1g, paragraphs 7 and 8. Accordingly, the respondent cannot be ordered to refund the two sums as stated above. The appeal hereby fails.”

    The crux of the Appellant’s case was that its overall input VAT exceeded its output VAT as envisaged under Section 16 of the VAT Act. Section 16 (1) (a) and (b) of the Act which states that: “A taxable person shall, on rendering a return under subsection (1) of Section 15 of this Act- if the output tax exceeds the input tax, remit the excess to the Board or if the input tax exceeds the output tax, be entitled to a refund of the excess tax from the Board on production of such documents as the Board may, from time to time, require.”