A Magistrate Court in Wuse Zone 2 Abuja has ordered the Federal Capital Territory Internal Revenue Service (FCT-IRS) to seal a company – Ifedi A.K. Nigeria Ltd, over the failure of its management to file the mandatory annual returns.
Magistrate Janada Balami issued the order today, Friday, May 3, after the lawyer to FCT-IRS, Michael Towolawi applied orally to have the company sealed to compel it to attend court to answer the complaint filed against it by the FCT-IRS, reports The Nation.
In her ruling, Magistrate Balami said the oral application to seal up the property located at No 6, Rudolf Close, Off Katsina-Ala Street, Maitama, Abuja was granted to compel the attendance of the defendant in court on the next adjourned date.
She proceeded to adjourn to May 16.
When the case was called, the company, named as the sole defendant, was not represented.
Towolawi told the court that the company has consistently failed from 2019 to 2023 to file its annual returns in violation of Section 81 of the Personal Income Tax Act, LFN, 2004, and amended in 2011.
He said all efforts to make the company comply with the law proved abortive as all notices served on the company, which were duly acknowledged, were not acted on.
Towolawi said a notice to prosecute was also served on the defendant on March 6, 2024, but without any response.
Speaking shortly after the court proceedings, the Director of Legal Services at the FCT-IRS, Festus Tsavar, said Ifedi A. K. Nigeria Ltd is one of such many companies in the FCT that would be prosecuted for tax-related offences.
He said the law requires “a company to file returns from 1st to 31st of January. Then, an individual is also expected to file from the 1st of January to the 31st of March.
“Once this period has passed and you have not filed, you have committed an offence contrary to Section 81, of the Personal Income Tax Act, laws of the Federation 2004 as amended in 2011.
“Once you are convicted the law provides that, upon conviction, you will pay a fine of N500,000 if it is a company, and in the case of an individual, the fine is N50,000 for each year of default.
“You also risk a jail of 6 months imprisonment and a fine can be one option or both, depending on the discretion of the court.
“In FCT we have actually just commenced the prosecution of defaulters and it is not going to be a one-off.
“One thing that is important for the public to know is that we are going to continue prosecuting them if they don’t comply with the tax laws because non-compliance is an offence.
“Take for instance the issue of filing of returns, if you file within the period you have not committed an offence and you are also not going to pay during the period of filing, you are not going to pay when you come to file, nobody is going to take money from you,” Tsavar said.
