The executive chairman of the Federal Inland Revenue Service (FIRS), Tunde Fowler, says the Service gave ample time to rich tax defaulters to comply before placing lien on their bank accounts.
“Before FIRS voted for lien on bank accounts of defaulting taxpayers, the Service granted a waiver of penalty and interest for three years (2013-2015), followed by the Voluntary Assets Income Declaration Scheme (VAIDS),” Fowler said.
“It was when millionaire and billionaire taxpayers with turnover of between N11 million and N1 billion did not take the opportunity to pay their taxes that FIRS decided to place lien on the accounts of defaulting taxpayers,” he said.
Fowler said the FIRS Establishment Act (2007) empowers the FIRS to place lien on the accounts of defaulting taxpayers. Insisting that what the defaulters were doing was wrong, Fowler queried why they should leverage on Nigeria, make money, but fail to chip in any form of tax to the nation.
“All defaulting taxpayers were considered, provided that such taxpayers came forward to declare their indebtedness, pay at least 25 percent of the outstanding amount and present a payment plan on the outstanding tax liability that was acceptable to the Service,” he said.
The window, he said, was opened from 5 October to 24 November, 2016, which a total of 2,400 companies took advantage of and the FIRS realised about N98.8 billion.
“Look, we look at all businesses, partnerships, corporate accounts that have a minimum turnover of N1 billion per annum for the past three years…From the 23 banks, we have analyses, we have about 50,000 who have a turnover of between N100 million and N1 billion and above and they don’t pay any form of tax. They are operating within our society and economy and do not remit or pay any tax,” Fowler said.
“If you have had the opportunity to make your wealth in this economy, in this society, the least you can do is to pay your tax. I plead with the banks to support us. In supporting us, you are supporting Nigeria; you’re supporting Nigerians and those who have chosen Nigeria as home. And most of all, you are supporting a future that we can leave behind for the upcoming youth of Nigeria,” he said.
Fowler, who spoke on the sidelines of the 49th Annual Conference of the Institute of Chartered Accountants of Nigeria (ICAN) where he was the keynote speaker, enjoined accountants not to go to bed with tax evaders, charging them to abide by the rule of law.
“The FIRS has also been empowered by Section 8 (1) (a) of the FIRSEA to assess persons chargeable with tax under the extant tax laws and enforce payment of taxes as may be due to government. Section 8 (1) (c) of the FIRSEA empowers the Service to collect, recover and pay to the designated account any tax under any provisions of this Act. Section 8 (1) (g) of the FIRSEA empowers the Service to adopt measures to identify, trace, freeze, confiscate or seize proceeds derived from tax fraud or evasion. The operating words in this provision are ‘power to adopt measures to address tax fraud and evasion’,” he said.
A further look at the FIRSEA shows that Section 31 provides for the power of substitution which is one of the enforcement powers of the Service. Section 49 of Companies and Income Tax Act (CITA) also provides similar powers to the Service.
Section 31 (1-4) of FIRSEA provides that “(1) The Service may by notice in writing appoint any person to be the agent of a taxable person if the circumstances provide in sub-section of this section makes it expedient to do so; (2) The agent appointed under sub-section (1) of this section may be required to pay any tax payable by the taxable person from any money which may be held by the agent of the taxable person; (3) Where the agent referred to in subsection (2) of this section defaults, the tax shall be recoverable from him; (4) For the purposes of this section, the Service may require any person to give information as to any money, fund or other assets which may be held by him for, or of any money due from him to, any person”.
Furthermore, S 49 (2) (a-d) of FIRSEA provides: “(2) Where an offence under this Act is committed by a body corporate or firm or other association of individuals:
(a) every director, manager, secretary or other similar officer of the body corporate; (b) every partner or officer of the firm; (c) every person concerned in the management of the affairs of the association; or (d) every person who was purporting to act in any capacity, commits an offence and shall be liable to be proceeded against and punished for the offence in like manner as if he had himself committed the offence, unless he proves that the act or omission constituting the offence took place without his knowledge, consent or connivance”.
Fowler explained that S31 (2) of the FIRS Establishment Act (FIRSEA) empowers FIRS to substitute. The said power can be invoked when any tax has become payable. Tax is said to become payable when the liability has been established, the said taxpayer is in default of payment of taxes as when due and demand for the said liability has been made, and adequate opportunity to be heard has been afforded the taxpayer and the taxpayer has refused to pay or has refused to object to the established tax liability. In such circumstance, the FIRS is at liberty to substitute by appointing an agent in place of the taxpayer.
CYNTHIA EGBEBOR, Abuja
