Lagos Sues Keystone Bank Over N104m Tax Debt

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The Lagos State Board of Internal Revenue (LBIR) has insituted a N140 million suit against Keystone Bank Limted before a Lagos High Court over the bank’ failure to pay alledged 2011 outstanding tax.

In the suit, which is before Justice Morenike Obadina (Mrs), the Lagos State is seeking for an order of court authorising it to distrain the bank’s goods, chattels, bonds and other securities for the purpose of enforcing payment of taxes in the sum of N104, 003,593.49 being the bank’s tax liability for 2011 assessment year.

In its statement of claim, the claimant prayed for a declaration that by virtue of the provisions of the Personal Income Tax Act 2004, Keystone Bank is liable to remit the amount of tax deducted or to have been deducted from the emoluments paid to its employees under pay-as-you-earn (PAYE).

In addition, the claimant asking for a declaration that the total amount of N104,003,593.49 for 2011 tax audit year is conclusive, unpaid and due as debt to the government of Lagos State from the defendant for the stated period of 2011.

Besides, Lagos State is seeking interest on the aforementioned amount at the prevailing commercial bank rate until judgement and further interest at the rate of 6 per cent per annum from the date of judgement until the whole sum is liquidated.

The claimant avers that by provision of Personal Income Tax Act 2004, Cap P8 laws of the federation of Nigeria ,defendant bank is obliged to deduct personal income tax from the monthly salary and emoluments of its employees resident in Lagos state and remit same to the claimant.

It added that the defendant is also obliged to deduct from payments made to individuals on contracts and other transactions under WHT scheme, deduct state development levy from emoluments of its staff, business premises levy and pay all monies to the claimant annually.

The claimant further submitted that after examining and reviewing the tax records of Keystone Bank in respect of 2011 tax year, the bank was found liable for under-deduction and under-remittance of tax under PAYE and WHT for the period of 2011 tax year.

The claimant averred that following the demand notice sent to the bank on its outstanding tax liability, the bank responded by demanding for soft copy of its computation on PAYE, WHT to enable it review its position on the liability.

After the review, the bank sent an objection letter to the claimant raising issues which were wrongly addressed while refusing to pay the said liability as prescribed by Personal Income Tax Act Cap P8, 2004.

The claimant stated that due to the defendant’s persistent failure to pay the said liability, a letter of intention to levy warrant of distrain was served on the defendant.

The claimant stated that at a meeting held with the bank for tax reconciliation, it was discovered by the claimant from the documents tendered by the bank that the PAYE remittances and withholding taxes were underpaid.

Also, the consolidated tax relief allowances were not applied fully as one per cent of gross emolument was not taken into consideration.

Furthermore, it was discovered that the National Housing Fund was not taken into consideration by defendant for the months of January to June 2011.

The claimant added that it was at the meeting with the bank, that it became aware of its outstanding liability of N104,003,593.49 for 2011 which has remained unpaid.

The bank is yet to file its defence, but the matter has been adjourned till June 14 for further direction.