By Olaoluwakitan Babatunde
They knew what was coming, but chose to ignore it in the belief that it was another impotent ultimatum. The Federal Inland Revenue Service (FIRS) had served corporate organisations owing a variety of taxes a six-week notice to pay up or have their operations disrupted through the shutting down of their offices. When the notice elapsed, the FIRS decided to give teeth to the warning it had issued.
Its enforcement teams in Lagos, Abuja, Aba, Owerri and Kaduna moved into the field to seal the premises of defaulting companies. On 11 May, the FIRS enforcement team, led by Mr. Emeka Obiagwu, closed down three offices of a major telecommunications firm for failure to remit N24.3billion in Value Added Tax (VAT). The same day, it also closed the official premises of Erin Petroleum (formerly Camac Petroleum Limited) which, at the time of the closure, owed N107.3million and $10.6million respectively. The exercise continued the next day in Lagos, Abuja, Owerri and Kaduna. In Abuja, two companies owned by controversial investor, Jimoh Ibrahim, were sealed. They are NICON Luxury Hotel and NICON Insurance.
FIRS Warrant of Distraint revealed that Ibrahim’s NICON Luxury Hotel in Abuja was sealed off for owing about N392, 623,765.00 in unpaid tax liabilities.
The service said the amount was made up of unpaid/unremitted liabilities of the hotel in Company Income Tax, Education Tax, Withholding Tax and Value Added Tax between 2009 and 2013.
The management team of the hotel, led by Mrs. Ogunlusi Abimbola, initially insisted that the company was not owing such a huge sum, putting the tax arrears of the company at N24 million. She added that of the sum she quoted, the company had paid N6 million.
Mrs. Abimbola, however, admitted that the hotel was aware of the tax liability, but claimed that a tax consultant to company had written the FIRS to complain about the it and that the hotel was already discussing with the FIRS ways of resolving the matter.
She, however, failed to produce copies of the correspondence between the hotel and FIRS, leaving the enforcement team with no option than to seal the hotel.
The sealing off of the hotel led to the closure of the other offices and three bank branches located within its premises.
Also the team evacuated the premises, forcing some members of the Peoples Democratic Party, PDP, holding a stakeholders’ meeting in the hotel to park their vehicles outside the premises as the team locked the gates.
From NICON Luxury Hotel, the team moved to NICON Insurance, where the enforcement team sealed the third, fourth and ninth floors of the building occupied by the company.
FIRS’ Distraint Warrant showed that NICON insurance was owing N182,685, 036 million in unremitted Withholding Tax and VAT from 2008 to 2012. In Lagos, the FIRS sealed the premises of Swift Networks, an internet service provider, and Pan Ocean Oil Corporation Nigeria Limited.
Swift Networks, which has its office on 31, Saka Tinubu Street, Victoria Island, Lagos, failed to remit N702 million to the government. Chief Operating Officer of Swift Networks, Chuma Okoye, pleaded for an extension of the period of grace but was told by Obiagwu that his company should have complied with the laws governing business in the country. Obiagwu added that FIRS has huge obligations to fulfill.
“Several notices have been served on the companies and I believe several moves were also made to compel the companies to remit their taxes. But most of these companies turn deaf ears; that is why we usually give them long rope,” he disclosed. Okoye explained that his organisation has started working on how to fulfill its obligations to government.
At the office of Pan Ocean Oil Corporation, the enforcement recorded some drama, with the company’s security men attempting to prevent FIRS officials from carrying out their duty.
It took the intervention of some staff to restrain the security men for the enforcement to take place. The management of the firm was told to send representatives to the FIRS office to discuss how to remit the $29.2million owed in VAT.
At Century Energy Services Limited in Lagos, the staff were told to vacate their offices and the building was sealed.
In Kaduna, FIRS officials sealed the office of System Properties Development Company Limited located at Shehu Crescent in Kaduna North Local Government Area for the company’s failure to remit over N20 million. The same fate befell Mutunci Company Nigeria Limited located at Plot 5, Kudenda Industrial Layout, Kaduna.
The company failed to remit over N42 million.
The owner of the company, an Indian whose, name was given as Mr. Vora, insisted that he was up to date in the payment of taxes and went ahead to show his 2016 VAT clearance certificate due to expire in December.
His explanation, however, was deemed unsatisfactory, as he was told by the enforcement team that there are discrepancies between the expected payment and the actual payment of over N42 million.
Mr. Suleiman Abubakar, leader of the enforcement team in Kaduna, said the exercise was to get defaulting companies to remit taxes.
“Today, we have invoked our statutory provisions and sealed off System Properties Development Company Limited and Mutunci Nigeria Limited, who have outstanding tax liabilities which run into millions.
“The companies will remain under lock and key unless and until the affected companies clear and liquidate their liabilities,” he said.
Abubakar disclosed that the tax enforcement exercise was going on across the federation.
In Owerri, Imo State, the offices of Imo Transport Limited and Holidays and Tours Limited were sealed. The companies owe N36,407, 775.42 and N2, 411, 523.72 respectively. In Aba, Abia State, the office of Dan Dollars Motors Limited was shut over its tax liability of N3,557, 361.16, while that of De Okafor and Sons Limited was shut over tax indebtedness of N2,270, 722.00.