THE Federal Inland Revenue Service (FIRS) has arrested the Managing Director of Air Nigeria, Mr. Kinfe Kayssay, for alleged failure to remit taxes amounting to N4.868, 496,152:00 billion.
The tax enforcement drive was led by Mr. James Binang, an Assistant Director in charge of Debt Enforcement and Special Prosecution Unit (DESPU) of the Service.
The arrest is aimed at recovering arrears of taxes accruing to government from Withholding Tax (WHT) and Value Added Tax (VAT).
The enforcement is part of a bigger move to recover the N170. I Billion (N170, 132, 089, 411:46) outstanding taxes owed to government by public and private organisations as well as ensure that all taxpayers are captured in the tax net.
During interrogation, of Kayssay Binang had observed that the FIRS management was not happy with the tax liabilities of the company and wanted to find out from the company, why it refused to pay the liabilities.
Binang explained that the refusal to deduct and remit taxes as well as failure to file tax returns amount to criminal offences.
Explanations were also sought from the company about the Tax Clearance Certificate (TCC) alleged to have been obtained by Air Nigeria despite its tax liabilities—which was a requirement to secure their expatriate quota.
Kayssay agreed that the company actually had tax liabilities to pay but pleaded for more time to settle the liabilities and comply with the necessary legislations as regards filing of tax returns.
He said that he will ascertain the reasons why the company did not file tax returns or made payments on the outstanding tax liabilities.
The company lawyer, Mr. Akeem Babatunde, indicated that the company’s did not request for TCC to enable them secure expatriate quota.
Earlier, the Service had served series of notices on the need for the company to pay their outstanding tax liabilities as well as comply with their tax obligations as specified by Nigerian tax laws or face punitive action.
Apart from the tax liabilities against Air Nigeria, the company has also failed to file annual “Tax Returns’’ in 2011, as when due while the one for 2012 pend.
Specifically, Section 31 of the VAT Act No 12 of 2007, provides that: “ A taxable person who fails to submit returns to the Board is liable to a fine of N5,000 for every month in which the failure continues’’.
A little over a month ago, the FIRS arrested Chief Executive Officers (CEOs) of seven companies in Lagos for alleged failure to remit taxes totaling N2.17 billion.
The companies involved in that enforcement drive and the amounts are Pivot Engineering Ltd, N609, 911,992:36, Reliance Telecommunications Ltd, N592,756,627:00, HITV Ltd, N309,500,065:55 and UTC Nigeria Plc, N277,589,163:74, Sweet Sensation Confectionary Ltd, N155, 483,013:00, Entertainment Highway Ltd, N197, 444,964:55 and John Holt Nig. Ltd, N33, 073,487:52.
The arrest is also warning to other organisations and individuals in the country on the need to ensure deductions and remittance of their tax obligation as provided by Part V1, Section 40 of the FIRS Establishment Act 2007.
“Any person who being obliged to deduct any tax under this Act or the laws listed in the First Schedule to this Act, but fails to deduct, or having deducted, fails to pay to the Service within 30 days from the date the amount was deducted or the time the duty to deduct arose, commits an offence and shall, upon conviction, be liable to pay the tax withheld or not remitted in addition to a penalty of 10 per cent of the tax withheld or not remitted per annum and interest at the prevailing Central Bank of Nigeria minimum re-discount rate and imprisonment for period of not more than three years,’’ the section stated.