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Traders tell Nigerian state tax office they can’t stay silent about unfair taxation

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Igbo traders in Ilorin, north central city in Nigeria, have, after a long silence on Wednesday explained ongoing tiff with Kwara Internal Revenue Service, KWIRS, as a demonstration of unfriendly tax regime killing businesses in the country.

The traders in a lengthy narration via a press release (see full text below), accused KWIRS of levying retroactive taxes on them.

They also contend that while there are no basis for such actions since they never evaded taxes in the years under review, the revenue service went outside the state tax laws to scapegoat them for no just reason.

In the press release signed by Festus Ezenwobi, under the Kwara Igbo Traders Association, KWAITA, asked the Governor, Mallam Abdulrazaq Abdulrahaman to wade into the matter.

Igbo shops especially in the Ilorin Metropolis have been shut down after the business of Sir Theophilus Agunwa, owner of Top Biz International, a trading store, and  Mr Chukwu Peter Ekemesi, owner, Chuppet Stores were closed by KWIRS while alleging dodging tax obligations.

The business men through KWAITA had denied the charges, insisting that it has paid all its taxes till date.

Rather, according to the traders, KWIRS had undertaken to tax them retroactively outside Kwara tax law.

The association explains that they have been paying taxes individually through KWAITA before the establishment of KWIRS in 2015.

They had an agreement with KWIRS to facilitate tax remittances from their members.

However, KWIRS recently informed them that they no longer require the services of KWAITA and intend to engage individuals directly for tax assessments and collections.

Despite members having paid taxes individually and received receipts, KWIRS began sending new assessments claiming arrears from previous years when KWAITA assisted in tax remittances.

The association has tried to resolve the issue with KWIRS, citing existing state tax laws from 2015 and 2020.

They highlighted that their members have paid taxes up to 2022 without any indication of arrears on their receipts.

They express concern over retroactive taxation and call on Governor Abdulrahaman Abdulrazak to intervene in the matter, saying that they feel unfairly targeted by KWIRS.

The statement details the events leading to the shutdown of Igbo businesses in Ilorin and emphasizes that KWAITA is willing to cooperate with direct assessments by KWIRS but opposes arbitrary retroactive taxation.

They seek a fair resolution and urge the governor to intervene on their behalf.

 

SEE FULL TEXT:

Text of press statement by members of the Kwara Igbo Traders Association, KWAITA, on the current disagreement with KWIRS and consequent shutdown of Igbo businesses in Ilorin

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We the entire members of Kwara Igbo Traders Association, KWAITA, wish to explain our side of the ongoing disagreement between us and the Kwara Internal Revenue Service, KWIRS.

It is necessary to recall that our members have been paying taxes, not as group, but as individually but through KWAITA.

This arrangement existed before the establishment of KWIRS in 2015 when they invited our leaders and sought out cooperation in the remittances of tax (personal income tax, PIT) from our members.

Since 2015, we had an agreement to sure that our people make themselves available for assessment by the service and placed in different categories of tax remittances for onward payment.

We have always encouraged our members to pay. When they do so, we help remit the money, PIT.

This arrangement continued till last year when we received a letter from KWIRS that our cooperation/services is no longer needed.

The service said that they intend, thence forth to engage individuals directly without a middle party or trade association.

KWAITA as an association have no issue, whatsoever, with the new arrangement as demanded by KWIRS.

It is on record that we have always encouraged our members to show cooperation in tax remittance. To wit, we were applauded and given a honourary plaque in 2018 as Responsive association by KWIRS.

But it is important to note at this point that all our members have paid their tax (PIT) individually from 2015 to date and were issued with Kwara state revenue receipt for PIT individually after due assessment.

We have documents to back this up and we also state that nowhere in the said document were we told that we owe any tax obligation in arrears.

To our surprise, the KWIRS  started writing to our members with new assessments, insisting that we are owing PIT arrears from 2016 to date, years under which KWAITA helped in tax remittances.

Those years, KWIRS found our services invaluable that KWAITA was awarded 10 percent of remittances as tax agent.

We have approached the service on many occasions trying to make them understand that our members are not owing but to no avail.

So far KWIRS has insisted that the law permits them to re-access any tax payer as far back as seven years or more and enforce payment.

We have not found any references for any such law.

What we familiar with, and which our legal representation has presented were extant law of the State House of Assembly as enacted in 2015 and amended 2020.

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We had advised that KWIRS work within the scope of the said law.

KWIRS insists that our lawyer should not tell them how to do their job.

We woke up on 1st March 2024 to see the KWIRS bring mobile Court to shops of two of our members and Carry out the hearing in the absence of our members.

Our members were not given any notifications to the effect.

Consequently, they sealed their shop immediately.

This was the cause of the 1, March shop closure by our members in Taiwo Road Ilorin.

The chief of staff and SSA, in the absence of HE, Mallam Abdulrahaman Abdulrazaq, didn’t hesitate but waded into the matter to help find resolution.

Both officers encouraged us to dialogue.

A truce was reach as two of our members was asked to pay a commitment amount of N250, 000 each, while KWIRS wrote the revenue Court to vacate their order and un-seal the shops.

We were set to have a final talk on 15th March. But the next morning, the KWIRS wrote us expectedly totally deviating from the peace arrangement as initiated by the chief of staff and SSA to governor.

KWIRS insisted that:

  1. KWAITA as represented at the peace meeting with the chief of staff are not allowed in the 15th March meeting as agreed.
  2. That the two persons directly involved should come only with their lawyer or tax consultant.
  3. That the two individuals should come with their business bank statement of account from 2016 to date.
  4. Their personal bank statement from 2016 to date.
  5. Their wife’s bank statement of account from 2016 to date.
  6. Their B.V.N. and that of their wife’s.
  7. And finally, without any of those requirements that the said meeting won’t hold.

Given the tone of the said letter, we understood that KWIRS is not open for deliberation or dialogue.

Nevertheless, our two members  were prepared with the lawyer for the meeting until when it became obvious that our counsel couldn’t make it that morning.

The lawyer wrote to  kWIRS and sought for a new date of either 20th or 21st when he will be around.

Within an hour we got a letter of rejection from KWIRS and threat to seal up the shops the second time if the two individuals involved failed to pay at least 50% of the purported arrears.

Our lawyer then filed a vacation appeal to the Revenue Court which was scheduled for hearing on 21st of March.

But KWIRS rejected the summon from the court bailiff.

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The bailiff went to court and swore to an affidavit of rejection.

KWIRS went to court on the same day to asked the court to go and re-seal the shops again and the court directed them to re-apply for another experte as the previous one had expired.

Based on this, the KWIRS requested for reload order of the vacated execution of mobile Court judgment on 1st March.

They also went ahead seal up our two shops by 5.00am with one police van and three KWIRS and thereby locking up two staffs who sleep in one of the shop up till this moment.

Given the foregoing, KWAITA reiterates that:

  1. That we are not opposed to direct assessment of our members by the KWIRS as being alleged in the media.
  2. That we are not in any way insisting on paying our tax through the union and against the new directives of the KWIRS as being alleged in the media.
  3. That we have told KWIRS even in the presence of the chief of staff to go about their duties of accessing and collecting tax directly from our members according to the enacted law of the state 2015 and as amended 2020.

4.That our members have individually paid all their previous taxes up to 2022 and have the evidence of the receipt.

  1. That our members who paid and have their PIT receipt without indication of any arrears on the tax receipt shouldn’t be taxed retroactively.

We state clearly that the point of argument is arbitrary retroactive taxation that has no basis in the state tax law and not in conformity laws of natural justice.

We are also using the medium to call on his Excellency governor Abdulrahaman Abdulrazaq, to come to our aide.

KWAITA have been peaceful, law abiding, cooperative with our host community and have been paying our tax obligations.

We plead with the governor to urgently prevail on KWIRS who bent on taxing us unfairly.

Signed:

Festus Ezenwaobi


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