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 Daily
Independent Online.
* Wednesday, June 16, 2004.
Sales tax: Tinubu gives Lagos firms two weeks’ ultimatum
By
Lekan Sanni
Correspondent, Lagos
The stage is set
for a major confrontation between the Lagos State Government and business
organisations as Governor Bola Ahmed Tinubu on Tuesday issued a two-week
ultimatum to them to comply with the new sales tax law or face closure.
The governor was reacting to a
statement credited to the President of the Manufacturers Association of
Nigeria (MAN,) Charles Ugwu, that members of the association should not
comply with a Lagos State High Court ruling that businesses abide by the tax law as passed by
the House of Assembly.
Receiving in audience the
management team of the Nigeria Breweries Plc, led by its Managing
Director, Mr Festus Odimegwu, Tinubu said the state is now poised to
enforce the payment of the sales tax, stressing that his administration
has been patient enough.
He said the state has waited for two years for
compliance, even when MAN went to court to challenge the new law, which
the state won.
“It is the height of
irresponsibility for anyone to make such a statement. The court judgment
and the appeal did not include a ‘stay of execution’. Anyone wishing to
do business in the state should do so within the ambit of the law,” he
said.
According to him, the state has
done its best by ensuring that the payment takes off this fiscal year,
even as he said that the implementation of the law ought to have started
immediately after its passage.
Tinubu regretted that companies
are more than willing to pay corporate tax to the Federal Government
while they have failed to assist the environment in which they operate.
In his view, it is the norm all
over the world for businesses to reinvest part of their profit to ensure
that the market is maintained and future profit assured.
The governor said the policy of
infrastructural development and improvement embarked upon by the state
requires the support of the private sector.
Odimegwu commended the governor
for his stance on many national issues, which he described as healthy for
the survival of the current democratic dispensation.
He also praised him for the
introduction of the Lagos State Traffic Management Authority (LASTMA) and
the Kick Against Indiscipline (KAI) brigades.
To him, the introduction of
LASTMA has impacted positively
on the flow of traffic in the state, with the state complementing
their effort with the provision of street lights at strategic places.
Odimegwu disclosed that the
fortune of Nigeria Breweries has increased tremendously since he took
over, with plants operating at full capacity.
The state Assembly passed the
tax law in 2002, after which the Organised Private Sector (OPS) went to
court challenging its implementation.
OPS contended that paying the
tax will amount to double taxation since they are already paying Value Added Tax (VAT) to the
Federal Government.
The Lagos High Court, in
dismissing the suit, noted that the state has the right to legislate on
intra state business and that the new sales tax law was validly made. The
court also ruled that VAT collection by the Federal Government is illegal since Abuja can
only legislate on inter state trade.
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