The Attorney-General of the Federation (AGF) has given the Lagos State government the go ahead to prosecute tax offenders, even as the federal government has reduced personal income tax in the country across the sectors.
Lanre Akinsala, Senior Special Assistant to Lagos State governor, Babatunde Fashola, said it is now a criminal offence for anyone to evade tax in the State, warning that tax evaders would be prosecuted, and when convicted would eventually become ex-convicts and therefore unable to hold public offices.
He warned that failure to file tax returns of 2011 before the end of March this year would become an offence.
Abimbola Sodipo, Special Adviser to the governor on tax said that there are 20 million people living in Lagos, out of which eight million are eligible to pay tax. He lamented that, only 2.7 million people are currently paying their tax, while the remaining 5.3 million people are tax evaders.
He said that the State government would no longer tolerate such attitude, and that it was completely unacceptable that few people would continue to pay the bills of others.
Henceforth, failure by a bank to render returns, books, documents and information on demand within seven days, render information on a new customer within seven days or to keep books of accounts would attract a penalty of N500,000 for corporate and N50,000 for individuals.
Making false statement and returns would attract N500,000 for corporate, N50,000 for individuals and imprisonment of not more than six months; false statement by persons in relation to tax payable or repayable attracts N10,000 or imprisonment of not more than six months., among others.
The Executive Chairman of the Lagos Inland Revenue Services (LIRS), Babatunde Fowler, said that the time has come for States to divest their minds from the monthly cheque that usually come from the federal government every month.
He said that with the reduction in personal income tax, fewer monies would be coming in, but when everybody contributes to the commonwealth, then government would have enough to spend on projects.
He said that based on the reduction in tax by the federal government to allow people have more spendable income, the State would lose an average of 53 per cent of what it used to collect.
For instance, the State would lose N118.79 million or 22 per cent of what it used to collect from local staff in the aviation industry, while it would lose N33.12 million or nine per cent of what it used to collect from expatriates.
At the manufacturing sector, there would be a reduction of N70.66 million or 38 per cent from the locals and N1.85 or three per cent from expatriates; staff of the transport sector would save 57 per cent or N21.98 million, while the expatriates would save N2.15 million or 10 per cent.
Locals in the multinationals would save 10 per cent or N79.91 million, while the expatriates would save six per cent or N86.95 million.
The public and the printing sectors are the greatest beneficiaries. Both would save 53 per cent of what they used to pay as tax. The public sector staff would save N45.83 million, while staff in the printing sector would save N9.32 million, among others.