Kaduna Electric has categorically denied allegations of owing N600 million in unpaid taxes, accusing the Kaduna State Government of engaging in “cheap blackmail” to divert attention from its own financial obligations.
This response comes after the Kaduna State Internal Revenue Service (KIRS) sealed the company’s headquarters over substantial tax issues.
Kaduna Electric has expressed shock at the shutdown, accusing the state government of resorting to “cheap blackmail” due to the government’s own unpaid electricity bills.
“The state government has failed to honor payments for the last six months, resulting in a debt of N1.16 billion, they have not paid a dime to Kaduna Electric for electricity consumed since January 2024, resulting in a total outstanding amount of N2.9 billion.”
The company refuted the claim of a N600 million tax liability, asserting that they owe less than N400 million and have been making agreed-upon monthly payments of N20 million since January 2024.
“We stand by the fact that these payments have been honored,” they said.
Since the new management took over in January, Kaduna Electric has demonstrated its commitment to resolving all tax-related matters responsibly, including keeping up with statutory monthly tax payments and settlement arrangements with KIRS.
Despite these efforts, the government has taken the drastic step of locking down the headquarters, including the crucial command and control center, integral to the company’s operations.
Operational control severely affected
The closure has significantly impacted Kaduna Electric’s ability to maintain full operational control. The dispatch center, essential for coordinating power supply, is now under lock and key.
In response, the company has activated its contingency recovery plan to continue operations. However, this measure limits the company’s visibility and control over its network, raising concerns about supply safety
Amidst these challenges, Kaduna Electric is determined to keep the lights on. “We are committed to ensuring that our customers receive uninterrupted power despite these hurdles,” said Abdulazeez
The company also raised legal concerns regarding the shutdown. KIRS secured a court order to close the headquarters, but Kaduna Electric contends that the court lacks jurisdiction, as tax matters should be heard by the Tax Appeal Tribunal, a specialized court.
The company’s legal team highlighted that it is illegal to distrain property for personal income tax. Nevertheless, the company stated it would comply with the court order.
The ongoing issue of non-payment for electricity by the Kaduna State Government significantly affects the entire electricity value chain, from generation companies to gas producers and the Transmission Company of Nigeria (TCN), all vital for ensuring a stable power supply.
Backstory
The Kaduna State Internal Revenue Service announced that it sealed the Kaduna Electricity Company Plc (Kaduna Electric) office over unpaid taxes amounting to N600 million.
The State Internal Revenue Service revealed that the decision is in line with Section 104 (1) & (4) of the Personal Income Tax Act, 2011, and Section 37 (3) & (4) of the Kaduna State Tax Codification and Consolidation Law, 2020, which empowers the service to enforce tax compliance.
According to Zakari Jamilu Muhammad, the service’s Head of Corporate Communications, its officials had to seal the business premises of Kaduna Electric due to significant established tax liabilities. Furthermore, he stated that the development was based on a court order.
Kaduna Electric later announced that it had cut off electricity supply to the Kaduna State Government House and other state government offices due to unpaid bills amounting to N2.9 billion.