… As FIRS Arraigns foreigners and Raids Hotels over Tax Evasion and ArrearsThe Finance Minister, Mansur Muhtar has said unless the Government partners the private sector and other stakeholders on tax matters, the country may not successfully get out of the current economic and social travails.
Muhtar stated this while opening the Federal Inland Revenue Service (FIRS) stakeholders’ consultative meeting with market women association leaders in the Federal Capital Territory, Abuja.
The Minister, who was represented by Binta Bello, Director Trade and Relations of the Ministry, stressed that women constitute a huge percentage of the informal sector who, if adequately sensitised and mobilised, could impact favourably on the nation’s tax revenue profile.
Earlier in her opening address, Chairman of the FIRS, Omoigui Ifueko Okauru, noted that a pilot scheme for tax clubs in schools in the FCT has been inaugurated, while plans are in place for a meeting with States Attorneys-General.
“The FIRS will not relent in its drive to ensure that all the nooks and crannies of this great country, the crucial nature of taxation on socio-economic development is understood and acted upon by all and sundry.
“I strongly believe that when people understand the relationship between the fulfillment of their tax obligations and the provision of social amenities and infrastructure by government, they will comply more willingly,” she said.
Speaking on the backdrop of the fluctuating revenues from petroleum sector of the Nigerian economy, Okauru affirmed that the Service would continue to meet its collection targets especially through the encouragement of voluntary compliance.
“We shall provide quality service that encourages taxpayers to partner with us, as well as provide a fair and effective revenue environment favourable for investment,” she said.
Meanwhile in another development, the Federal Inland Revenue Service (FIRS) in Lagos has arraigned a Danish man, Morten Lemb Foght, and an Indian national, Vinod Padmanabhan, before a Federal High Court in Lagos over alleged financial crimes and tax evasion to the tune of N1.6 billion. In Abuja too it raided some hotels in an effort to recover tax arrears running into millions of Naira from defaulters.
The accused persons in Lagos were arraigned alongside their companies, Em West Africa Limited and Emperion West Africa Limited, respectively before Justice Lambo Akanbi on a total 32-count charge. While Foght was said to be a director of Em West Africa Limited with the parent company in Denmark, Padmanabhan was a director of Emperion West Africa Limited. They were alleged to have committed the offence between January 2003 and December 2008.
According the charge sheet, the foreigners participated in the evasion of the value added tax to the FIRS and also failed to deduct companies’ income tax at the appropriate time. The matter has been adjourned till October 13 for trial.
Poised to recover the over N72 billion outstanding taxes owed by corporate organisations in the Federal Capital Territory, Abuja and to further boost government revenue for year 2009, the agency raided the hospitality industry for taxes. Assisted in the exercise by a team from the Nigeria Police, FIRS said it was the final warning for all tax defaulters to voluntarily agree on modalities for liquidating their debts most of which date back to 2001.
Led by the Acting Director, FCT Special Tax Office Department, Peter Olayemi, who briefed the different teams, the enforcement officers combed every nook and cranny of Abuja for corporate tax defaulters to make good its threat of bringing them to book.
According to Olayemi, after the grace period given in the undertakings, the next round of enforcement would involve sealing off business premises of all defaulting organisations.
He said the aggressive tax drive aimed at ensuring tax obligations were fulfilled promptly by individuals and corporate bodies, as part of their social responsibilities.
Olayemi said: “The enforcement involves ceiling off defaulting firm premises. But this time around, we are not yet at that stage. With the assistance of the police, we will get somebody to have undertaking on how the tax arrears will be liquidated.”
Among the defaulting organisations visited by the teams were the popular Rita Lori Hotel Limited located in Garki 11, Envoy Hotel and Gardens at Karu site, Mediterranean Hotel, Asokoro and Siman Suites located at Area 11, Garki.
At the Rita Lori Hotel, available records showed the management’s tax indebtedness amounted to over N13 million, covering the period from 2001 till date; while Envoy Hotel has over N9.7 million as tax liabilities for the same period.
Mediterranean Hotel, Asokoro has N13.97 million as accumulated taxes since 2004, while Simans Suites had the sum of N1.6 million as tax liabilities.
It would be recalled that at the commencement of its tax drive in May this year, the FIRS had disclosed that over N72,764,589,473.00 stood as the total outstanding tax arrears owed by organisations in the FCT.
The breakdown indicated that Withholding Tax stood at N23,179,750,647.26; Value Added Tax (VAT) amounted to N40,884,097,572.12, while Pay as You Earn (PAYE) was recorded at over N870, 074,125,374.
It would also be recalled that FIRS collected over N808.4 billion as revenue earnings within the first half of this year, with expectations of exceeding the figure in the remaining part of the year through intensified enforcement and tax collection exercises.
Between May and July 2009, it also generated over N22.9 billion through its tax enforcement and collection exercise, a development the FIRS Director of Corporate Communications, Etim Bassey, attributed to better enforcement measures by the FIRS.