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Mr. Kinfe Kahssay CEO Air Nigeria, being led away by Policemen and FIRS officials (Photo by FIRS) |
The
Federal Inland Revenue Service (FIRS) has confirmed the
arrest of the Managing Director of Air Nigeria, Mr. Kinfe Kayssay They say they had no choice and it was the last resort after several unfulfilled commitments by Air
Nigeria officials to pay their tax debts.
Kayssay was said to have been arrested over the airline’s failure to remit taxes amounting to N4.868, 496,152 billion.
But,
the airline issued a statement alleging an attempt to bring down the
airline; They queried why FIRS failed to collect taxes dating back to eight
years; claimed that FIRS invited its MD while at tax debt reconciliation
process was still ongoing; claimed that Air Nigeria will not be
blackmailed to bribe anybody on tax debts and that FIRS invaded its
offices in an uncivilised and condemnable manner reminiscent of the
military days.
FIRS responded in a statement on Tuesday signed by Emmanuel Obeta, FIRS’s
Director, Communications & Liaison’ Department, that the airline’s
claims were concocted “to obfuscate issues and whip up public sentiment
against a lawful agency of government, doing its utmost to ensure that
all business that operate within Nigeria, fulfil their minimal corporate
obligation to the Nigerian state.
“
It is true Air Nigeria is an offshoot of Virgin Nigeria and some of
these debts are old. But a substantial parts of the debts are as a
recent as two/three/four years ago. Discussions with Virgin Nigeria and
its successor had been on for quite a while with promises by the airline
to fulfil its obligation.
“FIRS’
election to go to Air Nigeria office in Lagos yesterday was the last
resort after several unfulfilled commitments by Air Nigeria officials to
pay their tax debts.
“At
discussions and meetings with FIRS officials, the age of these debts,
was not an issue at meetings with Air Nigeria officials.
“In
any case, it is trite law, clear to even university law undergraduates
that when you take over a business, you inherit all the acquired
business’ assets and liabilities. Thus, Air Nigeria is deemed to have
inherited all assets and liabilities when it acquired Virgin Nigeria. To
try to distance itself from the liabilities of Virgin Nigeria is not in
sync, with known business practice, law and international precepts.
“Between,
January -December 2008, Air Nigeria failed to deduct Value Added Tax
(VAT) amounting to the sum, (N633, 548,119.00k). Between January
-December 2009, outstanding VAT: (N1, 265,537,250.00k); 2010: (N1,
516,582,660.00k).
“Air
Nigeria, failed to file Annual returns for 2011 and 2012 as prescribed
by Section 55 (1) of the Companies Income Tax Cap C21 Laws of the
Federation of Nigeria 2010.
“Outstanding
Withholding Tax between January-December 2006, against Air Nigeria
totals (N394, 165,820.00k). This represented 10% of payments for direct
services to Air Nigeria.
“This
offence contradicts Regulation 5 of the Companies Income Tax (Rates,
etc, of Tax Deducted at Source (Withholding Tax) Regulations Cap. C21,
Laws of the Federation of Nigeria 2004 Outstanding Withholding Tax
against Air Nigeria, between January and December 2007 is (N775,
207,713.00k).
“In
January this year, Air Nigeria presented a counterfeit Companies Income
Tax Clearance Certificate purportedly issued by the FIRS, in favour of
Air Nigeria Development Company Ltd.
“This
TCC was presented to the Interior Minister to, inter-alia renew quota
positions for Twenty (20) Pilots and Ten (10) others.
“Documents
in possession of the FIRS show that Air Nigeria submitted a counterfeit
seal of the FIRS on a Companies Income Tax Clearance Certificate
purportedly issued by the FIRS”
On
the alleged blackmail, FIRS said, “ As a responsible organisation,
sworn and committed to the highest moral integrity and ethical conduct,
expected of a tax authority, the FIRS and its officials. abide with the
highest codes of ethical conduct.
“FIRS
wishes to state that there are recorded versions of encounters between
FIRS officials/ management with management staff/representatives of Air
Nigeria, over the airline’s N4. 86 billion debts due to the Government
of Nigeria. The allusion to blackmail is a figment of the company
officials’ imagination to obfuscate issues.”
On
the allegation of invasion and uncivilised conduct, FIRS said, “ The
tax enforcement drive was led by Mr. James Binang, an Assistant Director
in charge of Debt Enforcement and Special Prosecution Unit (DESPU) of
the Service. There are video and documentary evidence of their
invitation of Air Nigeria MD.
“We
wish to state that FIRS is a law abiding institution, that knows,
lives, breathes and acts in consonance with civilised conduct and known
democratic norms. This is not the first Enforcement FIRS is carrying
out. No company has complained about the conduct of our officials.
“We enjoin Air Nigeria to be a good corporate citizen and discharge its minimal obligation by paying up these long due debts.”