The Lagos State Government has sued 20 companies in the state for defaulting in tax payment as it steps up campaign to recover billions of naira owed the government by tax evaders.
The state government also said it had been able to drag 400,000 new tax payers into the tax net in the last one year to bring the total number of tax payers in Lagos to three million out of the eight million working populace in the state, adding that at least five million taxable Lagosians are not paying their taxes.
Special Adviser to Governor on Taxation and Revenue, Bola Shodipo at a ministerial news conference on Tuesday at the Bagauda Kaltho Press Centre, Secretariat, Alausa, in Ikeja, Lagos, southwest Nigeria, disclosed that 20 companies have been taken to court under the first batch of prosecution, saying that more would be arraigned.
Shodipo said the prosecution of tax defaulters became necessary owing to the inequitable position of the tax payers in the state whereby about five million out of an estimated eight million income earners were still non-compliant.
“As part of our strategies aimed at ensuring that all income earning residents of Lagos State pay taxes, the agency established the Criminal Prosecution Unit and this unit work in conjunction with the Office of the Attorney General and Commissioner for Justice.
“A lot of the defendants have chosen to pay up rather than go to court, while some are already in court now. The defaulters are being treated in batches. Our general observation is that there is a high number of defaulters from the informal sector,” he explained.
He said this compelled the government to organise a stakeholders’ meeting to address the issue of non-tax payment by the informal sector, saying that it was after the deadline given for them to comply ended that the government began enforcement.
The special adviser added that the state government has captured about 400,000 new tax payers into its tax net in the last one year, explaining that the development had increased the number of tax payers from the previous 2.9 million to 3.7 million.
According to him, the Internally Generated Revenue, IGR, of the state has grown by six percent in the last one year, stressing that compliance level in the state was still far from being satisfactory as 5million taxable adults defaulted in tax payments.
“The new 400,000 people that have been captured, through increased advocacy, appeal to conscience and other strategies are mainly people from the Organised Private Sector. We have got some people at the informal sector too, especially at the markets. This is a remarkable improvement but it is not where we want to be as there are still some five million people who default.
“Though we have begun enforcement, we are urging voluntary compliance. When people comply it saves costs as we do not spend money from other tax payers on enforcement activities. People should fulfill their part of the social contract by paying their taxes. This will enable the government to mobilise enough resources and deliver more development in the state,” he stated.
On the billing of all assessed properties and delivery, the special adviser disclosed that 624,648 records were processed from a total of 642,067, leaving a balance of 17,419 records uncharged, out of which 10,864 were exempted from Land Use Charges in line with section seven of the Land Use Charge law, adding that the government was presently resolving the balance of 6,555 records.
“Our delivery strategy this year is to ensure we cover all areas of the state within the first 30 days of the year, starting with the cosmopolitan Lagos and other commercial centres. In the course of enforcement, about 6,000 properties were visited. We pasted notices of defaults on 4,837 properties and people have responded by paying their outstanding,” he said.