Tax evasion: FIRS arrests 31 hotel CEOs

The Federal Inland Revenue Service on Thursday took a bold step towards ensuring compliance with the countrys tax laws as it arrested the chief executive officers of 31 hotels and hospitality centres in the Federal Capital Territory for tax evasion.The Deputy Director, Special Tax Office, FCT, FIRS, Mr. Peter Olayemi, led a special enforcement team to effect the arrests.The enforcement followed the expiration of a notice given to the firms to comply with the tax legislation or face punitive actions.About N170bn is said to be the outstanding tax liabilities currently being owed the FIRS by corporate defaulters.The huge tax liabilities had made President Goodluck Jonathan to direct the FIRS to ensure that all outstanding obligations were recovered within the shortest possible time.Addressing journalists shortly before the clampdown on the defaulters, Olayemi said the arrest became imperative following the companies failure to register for tax remittance.Their action, he noted, violated Section 41 of the Companies Incomes Tax Act, 2004 and Section 8 of the Value Added Tax Act, 1993.The sections, according to him, stipulate that all companies registered with the Corporate Affairs Commission and operating as businesses must register as tax payers and submit tax returns.Most of the companies, whose CEOs were arrested on Thursday, had not file any tax returns since commencement of operations despite several notices by the FIRS.Justifying their arrest, Olayemi said that Section 33 of the FIRS Establishment Act empowered it to enforce compliance with tax laws at the expiration of notification without further recourse to such companies.He said, "The management of FIRS mandated its regional offices to assist tax payers comply with the provisions of tax laws. To implement this directive, tax envelops containing all relevant forms to register for taxes were served on hotels and companies found not to have registered for tax remittance in the FCT, beginning from 2010 to early this year.""After about two months of service of the tax envelope, we discovered that some had yet to register. This attitude is viewed as deliberate and an affront on the tax laws of Nigeria, which should not be allowed to stand."All the arrested CEOs admitted to not complying with the tax laws, but promised to do everything possible to comply now.
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