Lagos Tax Agents Risk 3-Year Jail Term

LAGOS, July 12, (THEWILL) - The road closure by the tax agents of local governments (LGs) and local council development areas (LCDAs) will now attract a punitive measure of three-year imprisonment or a fine of N500, 000 with effect from today, Lagos State Government has said.

This prescription was specified in a bill, which Governor Babatunde Raji Fashola (SAN) signed into law today at Lagos House in Alausa, Ikeja thereby putting paid to the illegal activities of the tax agents of the councils in the state as the Law now "states collectible levies, rates and taxes for the council."

Special Adviser on Revenue and Taxation, Mr. Adeola Ipaye gave insight into the new law today before Fashola assented to it, adding that the law was to bring a new order into the state’s tax system and put an end to the activities of unscrupulous tax agents.

Ipaye described the new law as a double edged sword which would not only assist members of the public and Local Government Councils but would also do away with the activities of unscrupulous conmen who masquerade as officials representing the councils.

The Special Adviser explained that the law "prohibits any form of road closure for the purpose of collecting levies and prescribes a fine of N500, 000 naira or a three year jail term for anyone who purports to collect revenue on behalf of a Local Government without having the mandate of the State Joint revenue committee to do so."

According to Ipaye, the law empowers local governments to sanitize the revenue administration within their locality and also nominate the local government councils as authority to collect levies in all council areas.

He added that the law also provides that whatever levies or taxes is not listed in the schedule would be termed an illegality and whoever is found to be administering them would face the full wrath of the law.

He also informed that the new law recognizes the State Joint Revenue Committee to ensure harmony in terms of revenue at state levels as well as fixing rates that would be charged in terms of levies at local government levels and which must be publicized.

He said: "In certain instances, local governments can make use of revenue agents, but must fulfill certain minimum requirements prescribed by the Joint Revenue Committee before being allowed to work. It is illegal for anyone to act on behalf of any Local Government in collecting revenue when he has not been mandated by the Joint Revenue Committee, adding that such a person must be clearly identified.

Fashola today assented to a bill that prescribes approved levies for collection at all local government councils and local council development areas across the State with a charge to the citizens to always resist the temptation of parting with money to make quick payments when accosted.

He explained that for a long time, a number of residents would prefer to accomplish tasks by going through middle men which has often given room to extortionists who terrorize the citizenry, adding that people should do things by themselves.

The governor reiterated that the new law will close the gap existing between the government and the people as well as eliminate those who have exploited the gap to unleash uncomplimentary acts and undeserved pains on members of the public.

Fashola added that the law which has taken over two years to get through is particularly important because for a long time the continued misgiving between the State Government and the residents has been festered by activities of people who pretend to be government officials when they are not.

He said part of the complaints of the Organized Private Sector (OPS) about collection of levies and taxes in Lagos is that the companies do not know the specific taxes they are supposed to pay to the third tier of government, adding that if the rates are known, the payments could be factored into budgets for the companies on a yearly basis.

He affirmed that it was not enough for the government to always say such illegal collections did not emanate from it or even have its blessings but demonstrate that such levies are illegal by publicizing an approved list of levies collectable.

He explained that just like States, Local Governments are also constitutionally recognized and empowered to raise levies and taxes, and urged the Chairmen of the Local Government Councils to put the new law in the public domain to enable the people pay and also resist illegal taxes.

According to Fashola the law on list of approved levies in Local Governments is also a business friendly law that will allows small businesses which are most vulnerable to illegal collections to thrive.

He said as a government, the commitment must be to continue to empower growth of small businesses across board, urging the councils’ helmsmen to maximize the benefits of the new law by familiarizing themselves with the contents of the law and ensure that its contents is widely disseminated especially for the benefit of people in the rural areas.