Fear Of Sanctions Grip Firms With Tax Arrears
By EMMA EKE
FEAR of a possible clampdown has gripped corporate organisations in arrears of tax payment, with the management of some of them frantically plotting how they will not be embarrassed by the government.
The Chairman of the Senate Committee on Public Account, Senator Mamman Ali recently gave a directive that defaulting companies should be shut down.
This follows complaints to the committee that corporate organisations and government parastatals owe over N100 billion as unpaid tax to government in the past two years.
Among the firms allegedly involved in corporate tax evasion are two Global Systems of Mobile Communication (GSM) operators, the Niger Delta Development Commission (NDDC) and some banks.
Mrs. Ifueko Omoigue, chairman of the Federal Inland Revenue Service (FIRS) recently named MTN and NITEL as the telecommunications firms that have been indicted for not paying tax.
The FIRS chairman, while briefing the Senate committee, made a particular reference to MTN, which she said claimed to be "enjoying pioneer status" in the GSM business in the country as a reason for evading tax.
A breakdown of the amount standing against some companies mentioned by the FIRS indicated that about 20 states and about 600 local government councils were owing a total of N6.46 billion as outstanding tax, while NITEL alone owes N14 billion, and MTN owes about N3 billion.
"We are surprised to learn that even MTN which recently declared over N12 billion profit could be exempted from paying tax," said Ali.
He ordered that the FIRS should immediately commence a clampdown of the defaulting organisations, irrespective of their status.
Investigations by The Guardian reveal that the accounts section of the affected firms have been under intense pressure by their respective management to embark on reconciliation of their figures with FIRS.
But Mr. Tayo Ekundayo, the Assistant General Manager (Corporate Affairs) for the Nigerian Telecommunications Ltd (NITEL) denied that his company is owing any tax.
"It is on record that NITEL is the only government-owned company that pays a minimum of N2 billion yearly as tax. To the best of my knowledge, I'm not aware that there is any outstanding tax in the past years.
"But, if you were talking of 2003, which may have ended but not technically ended, I will say that we are still reconciling our accounts with the tax authorities and by the time the financial year is over, all outstanding tax would have been paid."
A revenue official with the MTN said naming the company is a case of giving a dog a bad name in order to hang it, going by the amount his company spends on community development efforts and other public relations.
Mr Yemi Adebowale, Public Relations Manager of MTN, said "as far we are concerned, we are still within the five year tax holiday stipulated by the law that licenced us."
The Chief Executive of Nigerian Communications Commission (NCC), Mr. Ernest Ndukwe, declined to comment on the issue.
One of his aides however confirmed that five years of grace was given to each of the GSM operators.
"Why single out MTN out of more than four GSM firms and other 10 fixed networks that NCC licensed. Those talking about tax evasion may have been ignorant of what the terms of the license contain," Ndukwe's assistant said.
