The Federal Inland Revenue Service (FIRS) on Wednesday sealed the premises of several companies in Lagos, over failure to fulfill tax obligations.
The FIRS team sealed Broadview Engineering Limited, Pivot Engineering Limited among others owned by a billionaire businessman. Pivot Engineering Limited, an Ikeja-based power engineering subsidiary of the Honeywell Group was said to have been in tax default to the tune of N610 million.
The FIRS team also sealed the premises of UTC Nigeria Plc (N278 million), John Holt Nigeria Limited, one of Nigeria’s leading assembly conglomerate and trading companies (N33 million). The others are HITV Limited, Sweet Sensation Confectionery Limited (N156 million), Reliance Telecommunications Limited (N593 million) and Entertainment Highway Limited (N196 million).
The Chief Executive officers (CEOs) of the foreclosed companies were also arrested. Their arrest was the outcome an enforcement drive by the FIRS to recover arrears of taxes accruing to the Federal Government from Company Income Tax (CIT), Education Tax (EDT), Withholding Tax (WHT) and Value Added Tax (VAT) still outstanding against various companies.
The FIRS taskforce also went to HITV Limited and Entertainment Highway Limited where they discovered the premises had been sealed by a certain back following a court order. Similarly, the premises of Reliance Communication was sealed and it was gathered that it was on the instructions of its company’s chairman, Anil Ambani.
The seal off action would have been after the FIRS must have carried out a mandatory assessment of what these companies owed either by assessing their tax liabilities after obtaining financial records, or they pass a Best of Judgement Assessment (BOJ). A BOJ is an assessment done without relying or partly relying on a company’s financial records, after which a letter is sent to the registered address or the most visible location of offices of the company. Next, FIRS sends a demand notice to the defaulting company if the company either fails to respond to the earlier sent letter of notice or a break down in tax negotiations.
FIRS then seal the premises of the companies after a stipulated period in demand notice has elapsed.