Non-payment of tax is a crime and attracts sanctions from the government. Recently, the Lagos State government appears to have also focused on entertainers.
On Monday, June 5, 2023, the government filed a 12-count charge against the managing director of an interior firm and a social media celebrity, Ehizogie Ogbebor, over alleged failure to file tax returns.
The state alleged that she refused to pay personal income tax to the state internal revenue service within the time stipulated by law since 2014 till date.
According to the charge, the defendant being a taxable personality in Nigeria failed to pay her tax, which contravened Sections 41 and 94 (1) of the Personal Income Tax Act, Cap. P8, Laws of the Federation, 2004.
It also stated that the offences contravened Sections 56(a) (b) of the Lagos State Revenue Administration Law, No.8, 2006.
When the matter came up on Monday before Justice Yetunde Adesanya of the state High Court sitting in Tafawa Balewa Square, the state prosecution counsel, Azeez Alli, told the court that the case was a matter of tax and he had a motion for substituted service.
In the motion of notice dated May 10, 2023, Alli, told the court that the prosecution was seeking an order of the court to effect substituted service on the defendant.
He said, “We seek the leave of this court for substituted service to paste the notice on the last known address of the defendant at plot 59, Fola Osibo Street, Lekki Phase 1, Lagos.”
Justice Adesanya who ruled on the motion for substituted service granted the order as prayed, adding that the substituted service should be served on the defendant.
The case was, however, adjourned till October 26.
Also, a popular Nollywood actress, Iyabo Ojo, was also on Monday given an ultimatum by the government to pay N18, 640, 092. 00 as personal income tax within seven days or risk jail term.
In the letter sent to the actress, the government said that Ojo had a tax liability of N7, 376, 000, for the year 2022 and an outstanding liability of N11, 264, 092 for the 2021 income year.
The actress was given a seven-day ultimatum to pay up or face consequences.
In her response to the letter posted online, Ojo faulted the process by which the tax amount was reached.
She wrote in part, “Governor Jide Sanwo-Olu please, how do you people come up with these outrageous personal income taxes you send on a daily basis? After paying for different types of taxes for one’s businesses, house, and all, you still come up with this huge amount and give me seven days to pay up.’’
This came four years after the government filed charges against Nollywood actress, Monalisa Chinda Coker and an ex-footballer Austine Okocha.
On March 3, 2019, the state High Court in Igbosere issued a bench warrant for the arrest of the actress and producer, Coker, over a tax evasion charge.
The state’s Ministry of Justice had filed an application alleging that the actress repeatedly failed to honour court summons.
The state filed a two-count charge against Monalisa over failure to file annual tax returns for six years and to pay income tax in respect of her company.
The charges were filed in 2017, according to prosecution counsel, Y. A. Pitan who said the actress had not appeared in court since 2017.
A part of the charge marked LD/5712c/2017 read thus, “Failure to furnish and file annual tax returns for the purpose of personal income taxation with the Lagos State Internal Revenue Service contrary to Section 94(1) of the Personal Income Tax Act 2004 (as amended).”
Also, an ex-Super Eagles captain Austine Okocha popularly known as Jay Jay Okocha, was issued a bench warrant of arrest on January 29, 2019, for failing to pay his income tax.
The state ministry of justice filed a three-count chargeagainst Okocha bordering on failure to furnish a return of income tax.
The then State Prosecutor, Dr.BabaJide Martins, told the court that the charge was filed on June 6, 2017, but when the case came up on October 5, 2017, the defendant did not appear in court.
Consequently, after several adjournments without the defendant appearing in court after service had been effected on him, the prosecutor urged the court to issue a bench warrant against him.
But when the matter came up on April 15, 2019, Okocha resolved his tax evasion case with the Lagos State Internal Revenue. The ex-international reached an amicable settlement of the case with the state authorities, which led to the case withdrawal from a Lagos High Court.
Okocha is not the first high-profile footballer to be dragged to court for tax evasion. Top stars such as Lionel Messi and Cristiano Ronaldo were hauled before courts for similar cases in Spain. In 2017, Messi’s 21-month prison sentence for tax fraud was commuted to a fine by Spanish courts while in 2019, Ronaldo was fined €18.8m (£16.6m) for tax evasion.
In his comment on the issue, A Senior Advocate of Nigeria, Mr Kunle Adegoke, described tax as statutory which everybody was liable to pay tax on his or her income.
He stated that if the tax imposed on the actors and the taxes were not supported by their earnings, the court would not uphold it.
Adegoke added that once it’s shown that they were earning income, they were liable to pay tax on the income being an obligation imposed by law.
He explained that they must be ready to look into their finances and that they could dispute what the government imposed as payable taxes, noting however that they would be required to show the income upon which their taxes would be computed.
The senior lawyer said, “I think that is the correct position of the law. They won’t be liable to pay more taxes than they are earning than what the law has imputed as the amount payable. Except if they can show that they are not earning income by which they cannot be made to pay taxes. That is the position of the law.
“I have read where some people are saying it is political or otherwise. But it will be bad if it is political, but there is nobody who is earning income who is not under obligation to pay tax. Even if the reason they are now asking you to pay tax is political, so far it’s supported by law and your income, then you are liable to pay.’’
Another lawyer, Mr Niyi Lawal, said there must be a yardstick for which one is being taxed to see the correlation with what an individual earns. He further said that tax in Nigeria was not properly done.
He noted, “We may belong to the same class. We may not be on the same level of production. It’s like what you produce is what you supply and that is what you are charged on. A tax should not be a class thing that if someone is so and so, that is what the person will be charged, no. You have to look at the production of that person, not just blanket charges.’’
In his view, another lawyer, Mr Olanrewaju Ajanaku, stated that the law was clear about personal income tax which on or before March 31 of every year an individual who is privately employed must file returns to the government for assessment of tax paid.
He explained that if an individual refused to do that, the person would be violating the law.
According to him, the government is right in charging them and what the government feels is accruable to them is what it has given them.
Ajanaku said, “If they tell any lies in those documents, the government can go ahead and make an in-depth investigation processed by a tax authority to recover tax undercharged in previous years of assessment. This is carried out when a taxpayer is suspected of tax evasion.”
In his opinion, Bodunrin Adewole, who is also a lawyer, said that it was a civic duty for citizens to pay taxes, adding that there was a difference between tax evasion and tax avoidance.
Adewole noted, “When you evade tax, you are not paying tax at all and avoidance means that an individual is not paying the proper amount. The law does not distinguish between entertainers and other civilians and if you work they will do an assessment. The law says people who are gainfully employed should pay their taxes. And if they file their tax returns they would be able to assess how much they should pay.
