Tax defaulting companies to face criminal prosecution

The Lagos State Government on Tuesday warned that any multinational that failed to remit its tax to the state would, henceforth, face criminal prosecution.The state’s Solicitor General, Mr Lawal Pedro, gave the warning in an interview with newsmen in Ikeja.

He said the criminal prosecution option followed delays being experienced by the government in getting big firms to pay tax through civil suits.

``We wanted to be civil about the issue of tax evasion in Lagos in the past years and that is why we have been taking them to civil courts to reclaim the money.

``We have now seen that even when judgement is obtained in our favour for the defaulters to pay the money, they will take us to the Appeal Court and even to the Supreme Court.

``The state government has resolved that, henceforth, we will not only be focusing on civil action against tax defaulters, but we will also use criminal prosecution," Pedro said.

He said it was a criminal offence, under the Income Tax Act of the Federation, for companies and individuals not to pay tax.The solicitor-general lamented what he called the slow  judicial process in the country, adding that the issue of taxation was being treated with levity.

Pedro recalled that Justice R.I.B Adebiyi of an Ikeja High Court had on March 7, 2008, delivered judgement in favour of Lagos State Government against Shell Petroleum Development Company Nigeria Ltd (SPDC).

The judge ordered SPDC to pay N138.7 million-- being under deduction and remittance of taxes due to the government under Pay As You Earn and Withholding Tax Scheme for 1999, 2000 and 2001.

SPDC filed an appeal against the judgement at the Appeal Court and paid the judgement sum to the Chief Registrar of the High Court of Lagos State, pending the determination of the appeal,’’ he stressed.

Pedro said the case was still being heard at the court four years after the judgement was delivered, adding: 

such monies could have been used for some development purposes’’.

He advised companies to forward their complaints to the tax office or seek legal redress.When you have a genuine complaint, this will be properly looked into.

But for anyone to refuse to pay tax is a criminal offence and we intend to prosecute offenders."

Source:businessdayonline