Text of a Press Release by Nigeria’s Federal Inland Revenue Service on Tuesday to addressed what it described as “misleading claims in a section of the media” following the invitation and subsequent arrest of the Managing Director of Air Nigeria, Mr. Kinfe Kayssay, over the airline’s failure to remit taxes amounting to N4.868, 496,152:00 billion:
Following the invitation of the Managing Director of Air Nigeria, the airline issued a statement alleging orchestrated attempt to bring down the airline; queried why FIRS failed to collect taxes dating back to eight years; claimed that FIRS invited its MD while at tax debt reconciliation process was still ongoing; claimed that Air Nigeria will not be blackmailed to bribe anybody on tax debts and that FIRS invaded its offices in an uncivilised and condemnable manner reminiscent of the military days.
The FIRS Management wishes to state that these claims are concocted by Air Nigeria n an attempt to obfuscate issues and whip up public sentiment against a lawful agency of government, doing its utmost to ensure that all business that operate within Nigeria, fulfil their minimal corporate obligation to the Nigerian state.
1. WHY IS FIRS COLLECTING AN 8-YEAR OLD DEBT TODAY
It is true Air Nigeria is an offshoot of Virgin Nigeria and some of these debts are old. But a substantial parts of the debts are as a recent as two/three/four years ago. Discussions with Virgin Nigeria and its successor had been on for quite a while with promises by the airline to fulfil its obligation.
FIRS’ election to go to Air Nigeria office in Lagos yesterday was the last resort after several unfulfilled commitments by Air Nigeria officials to pay their tax debts.
At discussions and meetings with FIRS officials, the age of these debts, was not an issue at meetings with Air Nigeria officials.
In any case, it is trite law, clear to even university law undergraduates that when you take over a business, you inherit all the acquired business’ assets and liabilities. Thus, Air Nigeria is deemed to have inherited all assets and liabilities when it acquired Virgin Nigeria. To try to distance itself from the liabilities of Virgin Nigeria is not in sync, with known business practice, law and international precepts.
2. AIR NIGERIA DEBT FIGURES
Between, January -December 2008, Air Nigeria failed to deduct Value Added Tax (VAT) amounting to the sum, (N633, 548,119.00k). Between January -December 2009, outstanding VAT: (N1, 265,537,250.00k); 2010: (N1, 516,582,660.00k).
Air Nigeria, failed to file Annual returns for 2011 and 2012 as prescribed by Section 55 (1) of the Companies Income Tax Cap C21 Laws of the Federation of Nigeria 2010.
Outstanding Withholding Tax between January-December 2006, against Air Nigeria totals (N394, 165,820.00k). This represented 10% of payments for direct services to Air Nigeria.
This offence contradicts Regulation 5 of the Companies Income Tax (Rates, etc, of Tax Deducted at Source (Withholding Tax) Regulations Cap. C21, Laws of the Federation of Nigeria 2004 Outstanding Withholding Tax against Air Nigeria, between January and December 2007 is (N775, 207,713.00k).
In January this year, Air Nigeria presented a counterfeit Companies Income Tax Clearance Certificate purportedly issued by the FIRS, in favour of Air Nigeria Development Company Ltd.
This TCC was presented to the Interior Minister to, inter-alia renew quota positions for Twenty (20) Pilots and Ten (10) others.
Documents in possession of the FIRS show that Air Nigeria submitted a counterfeit seal of the FIRS on a Companies Income Tax Clearance Certificate purportedly issued by the FIRS
3. ALLUSSION TO BLACKMAIL
As a responsible organisation, sworn and committed to the highest moral integrity and ethical conduct, expected of a tax authority, the FIRS and its officials. abide with the highest codes of ethical conduct.
FIRS wishes to state that there are recorded versions of encounters between FIRS officials/ management with management staff/representatives of Air Nigeria, over the airline’s N4. 86 billion debts due to the Government of Nigeria.
The allusion to blackmail is a figment of the company officials’ imagination to obfuscate issues.
4. ALLEGATION OF “INVASION” AND “UNCIVILSED” CONDUCT
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.
There are video and documentary evidence of their invitation of Air Nigeria MD.
We wish to state that FIRS is a law abiding institution, that knows, lives, breathes and acts in consonance with civilised conduct and known democratic norms.
This is not the first Enforcement FIRS is carrying out. No company has complained about the conduct of our officials.
We enjoin Air Nigeria to be a good corporate citizen and discharge its minimal obligation by paying up these long due debts.