25 February 2014, Lagos – The Federal Inland Revenue Service may investigate cases of under remittance of Personal Income Taxes during the tenure of the suspended Governor of the Central Bank of Nigeria, Mr. Lamido Sanusi.
Investigations by our correspondent revealed that the FIRS was also worried by the Financial Reporting Council of Nigeria’s report on the central bank as the practice of tax evasion by many companies operating in the country had been on the increase.
Findings showed that in the last few years, about 350,000 companies had not filed tax returns.
A top official of the FIRS confided in our correspondent that following the revelations of the FRCN on the 2012 accounts of the bank, the service might look into the tax returns of the CBN.
Tax returns are forms used to record income taxes with the FIRS. They are used to calculate the tax liability of a company and must be filed every year for individuals and businesses that receive income during the year.
The FRCN had in its report on the financial accounts of the CBN, which was submitted to President Goodluck Jonathan, said one of the abuses of due process by the central bank was the non-compliance with relevant laws and other regulatory guidelines.
For instance, it said the CBN had yet to implement the provision of the Personal Income Tax (Amendment) Act, 2011, as the Pay-as-You-Earn deductions were calculated in line with the provisions of the PITA 2004 rather than that of 2011.
The report read in part, “The provision of the Personal Income Tax (Amendment) Act, 2011 are yet to be implemented by the CBN. Accordingly, PAYE deductions are computed in line with the provisions of the PITA 2004 instead of the relevant Act of 2011.
“This is short-changing; even the government is assisting staff members, who are largely unaware, to evade tax.”
But the senior official of the FIRS, who spoke to our correspondent on the condition of anonymity as he was not officially permitted to speak on the matter, said the service would study the contents of the report and carry out all necessary actions in the interest of the country.
The source said that once a case of tax evasion is established against the CBN, the provisions of the law would be invoked to recover all outstanding tax liabilities.
The source said, “I don’t think the content of that report has been brought to our notice, but what I can say is that we have, in recent times, been strengthening the fight against tax evasion and we have also encouraged voluntary tax compliance.
“Don’t forget that our law has been strengthened and in the light of this, if it is established that the CBN is short-changing the government, the FIRS will make sure that the relevant sections of the law is complied with.”
Section 74 (1) of the PITA 2011 states, “Any person or body corporate who, being obliged to deduct tax under sections 69,70,71 or 72 of this Act, fails to deduct, or having deducted, fails to remit such deductions to the relevant tax authority within 30 days from the date the amount was deducted or the time the duty to deduct arose, shall be liable to a penalty of an amount of 10 per cent of the tax rate not deducted or remitted in addition to the amount of tax not deducted or remitted plus interest at the prevailing monetary policy rate of the CBN.”
– The Punch