Lagos State Government has commenced criminal proceedings against about 238 individuals and corporate firms that had defaulted in tax payment, in line with certain provisions of the 1999 Constitution (as amended) and personal income tax (PITA) law.
The state government said all the tax defaulters risked imprisonment with jail terms ranging from six months to three years, stating however, that the court would determine all the charges on merit.
Commissioner for Justice and Attorney-General, Mr. Adeola Ipaye, made these known in Lagos at a press conference to announce the prosecution of tax evaders. Ipaye spoke along with the Special Adviser to the Governor on Taxation and Revenue, Mr. Bola Shodipo; and Chairman, State Internal Revenue Service (LIRS), Mr. Babatunde Fowler, amongst others.
Corroborating Ipaye, Fowler said the state had filed criminal proceedings against the 238 tax defaulters but added that the LIRS had formally written to about 14,000 tax defaulters across the state, some of whom had been quizzed by the police. He, however, noted that some of the offenders had been able to clear themselves.
Fowler added that about 15, 841 motorists, who breached the road traffic law, could not produce their tax clearance cards while he put the amount recovered from tax defaulters by state government at N17 billion.
Earlier, in his address, Ipaye explained the rationale behind the state government's decision to prosecute tax evaders, stressing that the government needed to ensure that eligible tax payers fulfill their obligations so that the state could move forward.
Reeling out statistics, the chief justice noted that out of the productive population of about eight million only three million performed their tax obligations in the last fiscal year. This number, he said, represented a marginal increase from 2.7 million recorded in the previous year.
According to him, "it shows that only three million are carrying the burden of eight million people. This is unacceptable because Lagos can generate a lot of revenue more to enable it fund its project of infrastructure renewal."
He lamented that the low compliance was because the state government had not been enforcing the Personal Income Tax (PITA) Law and Capital Gains among others.
"We have not been prosecuting the tax defaulters. That is why the margin is wide. This is what we must do now in order to develop more strategic infrastructure that will make a megacity of Lagos status function more effectively and efficiently," he said.
He emphasised that the Attorney-General of the Federation (AGF) had confirmed his power to prosecute tax evaders and as such the state government "is in position of enforcing the laws and we have indeed started the process of prosecution."
Also speaking, Shodipo lamented what the state government had been losing to tax defaulting and evasion.
He also cleared the air on the allegation of multiple taxation levied on the tax payers by the state government, while also arguing that the state government did not enforce any tax law different from those enacted by the Federal Government.