TAX: Chinese Firm, WEMPCO, Grounded Over N200m Debt
The placement of a lien on the accounts of a Chinese firm, Western Metal Products Company, popularly known as WEMPCO Steel Mill Limited, for non-payment of a N200m tax may have forced the firm into temporary closure.
Investigation by one of our correspondents showed that the company had scaled down its activities in the past six months as it had not been in production.
Inquiries at the Federal Inland Revenue Service showed that the company had been in default of tax payment for more than six years, thereby prompting the lien placed on the company’s bank activities.
The Head, Communications and Servicom Department, FIRS, Wahab Gbadamosi, told one of our correspondents in a telephone interview that the tax debt was for a seven-year period covering 2011 to 2017.
He said the company had not been complying with the provisions of the tax laws in the payment of taxes.
He said some of the taxes which the company had defaulted in remitting to government were Companies Income Tax, Value Added Tax and Withholding Tax.
Gbadamosi said, “The company has not been complying with FIRS laws in terms of Value Added Tax remittances and Withholding Tax.
“We only placed a notice of that on their office. We did not lock their office. They owe over N200m in tax VAT, Companies Income Tax and Withholding Tax from 2011 to 2017.
“What we place on their office is a non-compliance sticker showing that the company has not been complying with the provisions of the tax laws and that it is a tax debtor to the government.”
A senior official in the FIRS also told our correspondent that the office of the company was not shut.
The official said based on the FIRS record, it was a lien that was placed on the account of the company rather than outright closure.
The source who pleaded not go be named as he was not officially permitted to speak on the issue said when a lien is placed by the FIRS on a company’s bank account, it implies that the company may not be able to have access to that account until it settles it’s tax liabilities with the government.
A visit to one of the factories of the company at Arepo-Magboro, Obafemi-Owode Local Government Area of Ogun State by one of our correspondents revealed that its activities were on the low ebb.
The vehicles within the premises were covered with dust, given the harmattan haze and road construction observed along that axis of the Lagos-Ibadan Expressway.
A male cleaner was equally seen sweeping the company’s premises, while private security guard and no fewer than five policemen, were at the security posts.
Few officials were also in their offices, but a brief conversation with one of the workers of the company confirmed that the low-key activities at the premises were related to tax challenges.
The official who spoke on the condition of anonymity said, “It is true we have slowed down on production. Again, the tax people were here.
“But now we have started producing. By next month, the company would have become fully operational.
“We sell nails, and tiles among other things. You can book your orders now.”
Efforts made to speak with the management of the company on the tax issue proved abortive. The telephone number of the group’s director, Robert Tung, was ‘not reachable’.
Text message sent to his mobile line was yet to be responded to as of the time of filing this story.
There was a media report in May 2019 that Wempco was planning to close its metal products business in Nigeria.
The management, however, denied the report in a statement.
It also denied the media report about its proposed sale of the Lagos Oriental Hotel (one of the businesses of the group) and exit Nigeria.
The firm said there had never been and there was no intention of the group exiting Nigeria.
The statement had said, “Our group has been in Nigeria for several decades and has witnessed many cycles of the Nigerian economy.
“Although the Nigerian economy faces tough times, our firm belief in the resilience of the nation‘s economy remains unshaken and we will continue to develop alongside Nigeria for many decades to come.
“WEMPCO Group of Companies remains fully committed to contributing to the ongoing growth and development of Nigeria.”
The firm also denied reports that it had relied on waivers from the government to function.
It added that the WEMPCO group had never received special concessions outside of those extended to industries as a whole.