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More trouble for Air Nigeria, as FIRS prosecutes its MD

These are not the best of times for Air Nigeria and its managing director, Mr Kinfe Kahssaye are facing trial at a Federal High Court, Abuja, for allegedly evading remittance of tax amounting to N4.871billion.

Only recently, the fleet of Air Nigeria was grounded by the Nigerian Civil Aviation Authority, NCAA.

The 11 count-charge signed by Assistant Director, Tax Investigation and Special Enforcement Department, James Binang, was brought pursuant to Section 174 (1) of the 1999 Constitution and Section 47 of the Federal Inland Revenue Service, Establishment Act, FIRSEA 2007.

The accused allegedly failed to deduct and remit Value Added Taxes (VAT) amounting to N286,955,237 billion between January-December 2007; N633, 548,119.00k between, January -December 2008 and N1, 265,537,250.00k between January -December 2009.

They also allegedly to deduct and remit N1,516,582,660.00k to the FIRS between Januar and December 2010 and a Witholding Tax (WHT) amounting N394,165,820 being 10 percent of the payments for direct services.

The airline in January 2012, is also accused of presenting a counterfeit Companies Income Tax Clearance Certificate as having being issued by the FIRS, in favour of Air Nigeria Development Company Ltd.

The company, claimed FIRS, presented the TCC to the Interior Minister to, to enable the company renew quota positions for Twenty (20) Pilots and Ten (10) others.

According to Count eight of the charge, the Withholding Tax liabilities against Air Nigeria, between January and December 2007 is N775, 207,713.00k.

FIRS in the charge also claimed that Air Nigeria submitted a counterfeit seal of the FIRS on a Companies Income Tax Clearance Certificate purportedly issued by the tax agency, in contravention of the Section 55 (1) of the Companies Income Tax Cap C 21 Laws of the Federation of Nigeria 2010- an offence punishable under Section 55 (4) and (%) of the same Act.

Other alleged infraction, by Air Nigeria, was that the company 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.

Count nine revealed that the company, claimed FIRS, presented the TCC to the Interior Minister to, to enable the company renew quota positions for Twenty (20) Pilots and Ten (10) others.

 

The alleged offences

contradict Section 40 and 43 of the FIRS (Establishment) Act No. 13 of 2007, Section 55(1) of the Companies Income Tax Cap C21 Laws of the Federation of Nigeria 2010 and 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.No date has been fixed for the suit.

On Monday, FIRS arrested Kahssaye, Managing Director, Air Nigeria at the airline’s Lagos office and took him to Abuja.

Air Nigeria said on Monday that some of these debts were old debts. But the FIRS countered that a company acquiring another company inherits all assets and liabilities of the company.

Air Nigeria in another release on Tuesday signed by its Media Relations Manager, Samuel Ogbogoro stated that “Air Nigeria is not indebted to the government on current taxes since the acquisition of the airline by Dr. Jimoh Ibrahim, OFR. We therefore consider the FIRS action as uncivilized and condemnable. ”

We are at a loss as to what the FIRS has been doing for the past 8 years without collecting the taxes from previous management of the airline. We assure the general public that Air Nigeria cannot be intimidated by this crude approach and will not be ready to give bribe to any person no matter how highly placed. We will brief the general public as the issue progresses. “

AmarSim Associations Development Consultants

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