Legality of production of tax (clearance) certificate by surety as bail condition in court (3)

A closer look at Section 85(4)(v) PITAM reveals an omnibus clause, which provides that TCC should be for “any other transaction as may be determined from time to time.” Since the provisions of PITAM are applicable to tax authorities at both the Federal Government and the State Governments, one can safely assume that Ondo State Internal Revenue Service is collaborating with the Ondo State Judiciary pursuant to section 85(4)(v). There is still a difficulty in this regard because the Ondo CJ directive is that one year tax should be paid while PITAM demands that tax be paid for three years. Of greater controversy is that the law did not provide for the exact sum to be paid by a taxpayer.

Section 2(2) of PITAM provides that income tax might be imposed for any year of assessment on individuals by the State in which the individual is deemed to be resident for that year. Therefore, residence is a principal factor that determines where an individual should pay his personal income tax. As it concerns detainees who are not resident in Ondo State, the implication of the CJ’s directive is that they will be subjected to double taxation when their relations, who are taxpayers in other States, are compelled to pay income tax in Ondo State for bail purpose only. To this category of people, the directive will be unconstitutional regard being had to Item 8 of Part 11, Second Schedule of the Constitution (as amended), which provides that:

“Where an Act of the National Assembly provides for the collection of tax or duty on capital gains, incomes or profit or the administration of any law by an authority of a State in accordance with paragraph 7 hereof, it shall regulate the liability of persons to such tax or duty in such manner as to ensure that such tax or duty is not levied on the same person by more than one State.”

Even as it relates to persons resident in Ondo State, the directive is till unlawful for many reasons. First, pegging the assessment at N75,000 is grossly illegal as the presumptive tax regime provided for under section 36(6) PITAM provides enough latitude for assessments as low as possible. Section 36(6) PITAM provides:

“Notwithstanding any of the provisions of this Act, where for all practical purposes the income of the taxpayer cannot be ascertained or records are not kept in such a manner as would enable proper assessment of income, then such a taxpayer shall be assessed on such terms and conditions as would be prescribed by the Minister in regulations by order of gazette under a presumptive tax regime.”

Lagos State charges associational income tax under the presumptive income regime as low as N2,500, per annum per person. So, what is the basis of charging a person income tax as high as N75,000, per annum in Ondo State? It will be more preposterous to even assume that the assessment is for the past three years since the individual might not have been resident in Ondo State for the preceding three years. Upon the presumption that the assessment is for a year, the implication is that the Ondo State Internal Revenue Service has presumed the individual’s average monthly salary as N80,000, and the gross salary for the year as approximately N960,000. It is a surety of a gross salary of about N960,000, that is permitted under PITAM to pay an annual personal income tax of N75,000. No law allows the State Internal Revenue Service to make such assumption or presumption.

Where a surety is desirous of paying this tax imposition of N75,000, he will still run into the challenge of time. He has to make the payment through a designated bank and wait for the bank to send its manifest to the Revenue Service, where he will obtain a receipt to present to the court registrar in order to perfect the bail. These activities would certainly take a week to accomplish. The aphorism that justice delayed is justice denied becomes apposite here. The demand for tax certificate and the consequent delay, therefore, in obtaining it will be in breach of a detainee’s fundamental right to personal liberty. Take notice that an accused is presumed innocent until the contrary is proved. It seems to me that fulfilling the CJ’s directive will cause detainees to suffer for no fault of theirs but as a result of the State’s acquisitive tendency to generate more revenue.

Chukwuemeka Eze