Air Nigeria's CEO arrested over N5billion tax debt

The Federal Inland Revenue Service (FIRS) has arrested the Managing Director of Air Nigeria, Kinfe Kayssay, for alleged failure to remit about N4.9billion tax revenues due to the Federal Government.

The arrest of Mr. Kayssay is in pursuit of the drive by the tax Service to recover over N170.I billion outstanding taxes owed government by various public and private organisations as well as ensure that all taxpayers are captured in the tax net, the tax agency says.

Last May, the chief executive officers of seven Lagos-based engineering, telecommunications, cable television, and trading conglomerates were arrested over similar offences involving tax evasion totalling N2.17billion. 

Pivot Engineering Limited, an Ikeja-based power engineering subsidiary of the Honeywell Group largely owned by Oba Otudeko, was allegedly owing about N610million; UTC Nigeria Plc, a leading processor and marketer of baked goods (about N278million), and John Holt Nigeria Limited, one of Nigeria’s leading assembly conglomerate and trading companies (about N33million). 

The others were HITV Limited, one of Nigeria’s leading cable television firm (N310million); Sweet Sensation Confectionery Limited, one of Nigeria’s fast food chain (N156million), Reliance Telecommunications Limited (N593million) and Entertainment Highway Limited, N196million

The arrests were as a result of the tax enforcement drive by the Debt Enforcement and Special Prosecution Unit (DESPU) of the Service aimed at recovering arrears of taxes due to government from Withholding Tax (WHT) and Value Added Tax (VAT).

Air Nigeria was also accused of failure to file its annual tax returns for 2011 as and when due, while the one for 2012 is still pending, contrary to Section 31 of the VAT Act No. 12 of 2007.

The law provides that:  “A taxable person who fails to submit returns to the Board is liable to a fine of N5,000 for every month in which the failure continues.”

During investigations, the FIRS team reportedly found out that the airline, largely owned by Jimoh Ibrahim, committed serial criminal offences by accumulating tax liabilities and refusing to deduct and remit taxes from its workers, failure to file tax returns as well as refusal to obtain Tax Clearance Certificate (TCC), which is a prime requirement for expatriate quota approval.

Mr. Kayssay, who was said to have agreed that Air Nigeria actually had outstanding tax liabilities to pay, pleaded for time to settle them, while taking steps to comply with the necessary legal procedures for filing tax returns.

Mr. Kayssay’s arrest followed series of demand notices served on the company to settle its outstanding tax liabilities as well as comply with their tax obligations as specified by country’s tax laws, failure which would earn its officials punitive actions.

Air Nigeria’s spokesperson, Samuel Ogbogoro, requested for time to comment on the development.

FIRS Director, Communications & Liaison Department, Emmanuel Obeta, said the arrests of tax defaulters by the agency would continue, warning other organisations and individuals to ensure that all deductions from their workers’ pay are promptly remitted to the appropriate agencies in fulfilment of their tax obligations as provided by Part V1, Section 40 of the FIRS Establishment Act 2007.

“Any person who, being obliged to deduct any tax under this Act, or the laws listed in the First Schedule to this Act, but fails to deduct, or having deducted, fails to pay to the Service within 30 days from the date the amount was deducted, or the time the duty to deduct arose, commits an offence and shall, upon conviction, be liable to pay the tax withheld or not remitted in addition to a penalty of 10 per cent of the tax withheld, or not remitted per annum, and interest at the prevailing Central Bank of Nigeria minimum re-discount rate and imprisonment for period of not more than three years,’’ Mr. Obeta said.

PREMIUM TIMES could not ascertain how many of these arrested officers have actually been arraigned before the court for these offences as well as how much has so far been recovered at the end of the process.

When we put the question to Mr. Obeta, he requested for time for a detailed response to the enquiry.  




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