Companies Operating In Lagos State Jittery Over Tax Debts ; Edun, Cardoso, Moves To Rescue The Naira  

By Lateef Adegbite

This is   not the best of times for the over 6000 companies incorporated by the Corporate Affairs Commission, CAC, operation in Lagos, the nation’s Commercial centre.  The Companies which are scattered in the different sectors of the state economy   ranging from the Automotive, Construction, Financial services, Hospitality Food and beverages, packaging, Communication to  shopping, are jittery as  officials of  the Lagos state Internal revenue service, LIRS, enforce the state tax Laws to fish out  those  who had failed to remit  their Organisations Personal Income Taxes  of employees and remittance of consumption taxes.

Many believe that what  Babajide Sawo- Olu, the current Lagos state governor is doing  was not different  from what the previous  Administrations  had done  to boost the state internally generated  revenue by going after the CAC incorporated companies operating  in the state including Hoteliers, restaurant operators and events facility owners.

  Olayemi Michael Cardaso, a- one time Commissioner of Economic Planning and Budget and now governor of Central Bank of Nigeria, CBN, underBola Ahmed Tinubu, the first democratically elected state governor of the state  was said  to have ,  to have  written  and monitored the implementation  of the blueprint   which was said to have catalysed  the economic development of the state  including  leading  to the state’s development  of independent  tax revenues. Past and present governors of the south west most populous state was said to have followed religiously the Cardaso  economic blueprint for the state which was said to have boosted the each Administration’s  IGR.

Given the  adoption and implementation of the Cardaso economic blue print which had  inputs  of  Edun,  the then state Commissioner of Finance ,may have  informed why past and present Administrations  ostensibly to force the Companies , Hoteliers, restaurant operators and events  owners , including individuals  remit the Personal Income  taxes  of their employees and consumption taxes  to the state government coffers.

As  part of efforts to boost the state IGR,  the LIRS,  which had taken the bold initiative  to enforce the state tax  Laws was said to have   closed down 34 Companies  for failing  ‘’to remit  Personal Income Taxes of their employees  and non-remittance of consumption tax  for alleged purchase of goods and service.

A statement  by Monsurat Amasa-Oyelude, Head, of the gency Corporate Communications, LIRS,   shows that NTS Nig. Ltd, Medi-In Hospital &Pharma Services Ltd,  Avaya Nig. Ltd, Danvic Petroleum International Ltd, Business Intelligence Technology, Avaya Nig. Ltd,  GladstoneTech Ltd, Courier Plus   Services Ltd, Kurioucity Ltd, Medilag Ventures Oilfields and seven Six and Ten  Limited, had been closed down  and could only be reopened after defraying  outstanding tax payments.

The LIRS, statement further shows  that during the same operations by the LIRS, that led to the closure of the 24 companies and  23   hotels,  restaurants  and event facilities in the state, officials had discovered  that the affected  Companies, Hoteliers, Restaurants and event  facility owners   ‘’ deduct  taxes from their employees   and collect consumption  taxes for goods and services sold to  customers  but fail to remit same  to the  state government coffers as expected.

LIRS , Management , had listed Blitz Suites & Hotel,  Offshoroomz otel,  God’s Grace Hotel,  De Orange Place  Ltd,  De Santos Hotel,  Kentade Hotel Ltd,  Chamcee, Chelsea Suites, Falode Hotels, High Climax Hotel , Chez Moi Apartment  and Excellence Hotel as some of the tax defaulting Hotels, restaurants and events centre..

This si in addition to Bereans Venture( Tatalizer , Ebute Metta), LaAvril Hotel &Suites,  Milaco Guest House, New World Inn, Model Hotels Ltd, Rely Maritime Ltd,  4 Seasons Hotel,  Dream Land Hotel,  343 North  Restaurant  and Lounge and Jade Palace Chinese Restaurant.

In closing down the affected 24,  CAC , incorporated Companies, and 23 Hotels, Restaurants and event centres in the state,  Seyi Alade, the LIRS, Director, Legal services, had reported  that  their tax liabilities  to the state government was more than N356 million , noting that their s had caused  the state loss of huge revenue over the years.

 It was not surprising why  the Lagos state agency had no option  but to apply the full weight of the Law as contained  in the state’s development  blueprint written by Cardaso. He had told those that cares to listen  that LIRS, Management has opted to  implement the Law  to  the later as a way ‘’  to secure compliance  with the remittance  of consumption  and Personal Income Tax es of employees, to the Lagos  state government  to  facilitate the execution of projects  intended for the well of residents of the south western state.

The LIRS, legal Director, had alluded o the fact  that ‘’  some Companies, Hotels, Restaurants and events facility owners  deduct  Personal Income Taxes   from their employees’ salaries at the end of each month and charge consumption  taxes  on goods and service  purchased by customers  but chose’’ to withhold these payments  , illegally converting  the funds for their own use’’. 

The LIRS, Management appears to have sent a signal to the Companies, Hotel and Restaurant operators including events facility owners in the state that the enforcement exercise which had led the closure of many  of some the  business outfits in the state in the recent time    shall be a continuous exercise, stressing that  appropriate punishment shall be  visited   on all defaulters, urging them to endeavour to comply with extant  tax Laws  operational in the state. Informed sources told The Value News  that   that sone  high -net-worth  individuals  and companies  that had failed  to file their tax returns , are currently being prosecuted  in various Courts in the state

Enough of the LIRS. We turn to Wale  Edun and Cardaso, who are currently holding key positions in President Tinubu’s Administration  performance at the national  level, particular,  raising the value of the naira  which had remained very low since May 29, 202023 and now.

The dual who had worked  closely together  as Commissioners in Lagos  state  under Tinubu, as the state governor, may   have gone back to the drawing board to repeat what they had done to boost the Lagos state IGR,  to  strengthen naira which had witnessed a free fall to the North American Country of the United States, US, dollar, United Kingdom, UK, Pound sterling and the European euro at the official and parallel , popular, black market foreign exchange markets over  the last five months.

Cardaso: Governor CBN

Given the backing of Edun, the minister of Finance who has the ears of the Nigerian President, Cardaso, the apex bank governor had hinted last September the  regulatory bank had put the necessary structures in place  to settle   the over $7 billion  owed to the bank Creditors. 

The CBN  governor may have  based his confidence on repaying  the overdue Forex debts as  the country is  expecting to receive $10 billion  from the World Bank to ease  liquidity  in he forex market between  now and December 2023.

Cardaso, the CBN, governor,  who has been working round the  clock to block all loopholes that had been  continuously  exploited by economic saboteurs to weaken the naira over the years had confirmed that  that the apex bank  had commenced  the payment  of the outstanding  matured  forex  forwards  owed to Citibank, Stanbic IBTC, Standard Chartered Bank,  .

  Cardaso and his Management Team, may have taken the bold initiative to boost the value of the naira in the Forex market  after plunging to the all time low of N1,310.00/$1 at the parallel market on Wednesday, November 1, 2023 after  it commenced  clearing  a$7 billion  backlog  of matured foreign currency  forward transactions  that was said to have weighed on the local currency over the years

        This is evident as the N950.00 to the US ,naira  was said to have appreciated  at the official and parallel Foreign exchange markets  On Friday, November 3, 2023. The naira was said to have at N950.00 to the US dollar on Friday, November 3, 2023 as against the N1,024.00 traded against the  dollar on Thursday, November 2, 2023. On Saturday, November 4, 2023,   the black  market  exchange rate  of the naira to the US dollar  was said to be  N1,140.00 to the US  one dollar for buying and sold  at N1 45.00 to the dollar .  

Note that the official exchange rate   that was said to have been provided by the Cardaso led CBN,  was N783.67  to the US dollar.  Some of the Key factors   that was said to have contributed to the fluctuations   in the black market forex rate  include : demand supply,  economic conditions, both locally and globally , the country’s inflation rate. Balace of trade  and foreign reserves.

Othe factors  that were said to have had a direct impact on the  black market rates include government policies like   currency controls and restrictions  to manage the naira’s value,  political stability and internal stocks  such as changes  in oil prices .


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