Fiscal Crunch: LASG to Tax Housemaids, Gatemen, Private Guards
•Vows to prosecute tax avoiders, evaders
The Lagos State Government on Tuesday said it was mandatory for housemaids, gatemen, private guards and all domestic workers in the state to pay tax henceforth, citing the country’s gnawing fiscal crisis as the rationale for the decision.
The state government disclosed that it had established a rapid tax prosecution unit in the Ministry of Justice, noting that the long hand of the law “will catch up with any resident who avoid or evade tax in the state.”
The Chairman of Lagos Inland Revenue Service (LIRS), Mr. Olufolarin Ogunsanwo, unveiled the reforms at a news conference he addressed alongside the Commissioner for Finance, Dr. Mustapha Akinkunmi and the Attorney-General and Commissioner for Justice, Mr. Adeniji Kazeem, among others.
At the conference, Ogunsanwo explained its decision to bring all categories of domestic staff in the state’s tax net, which he said, became necessary due to the dwindling revenue accruable to the state from the Federation Account.
He also disclosed that the state government had started the process of overhauling informal sector operations with a view to easing voluntary compliance by payers in the huge sector at minimal cost to all stakeholders in the state.
He therefore noted that the state governor, Mr. Akinwunmi Ambode, had approved the upgrading of the informal sector operation to a full directorate, which he said, identified three categories of tax payers including household domestic staff, market women and artisans.
Aside, the executive chairman explained the importance of electronic tax clearance certificate (eTCC), which he said, would be required for a myriad of socio-economic and political activities in the state.
He noted that failure “to demand for eTCC by scheduled officers before concluding some transactions would attract the highest punishment of N5 million fine, three years imprisonment or both as contained in the Personal Income Tax Act (PITA), 2011.
“Section 85(2) of PITA addresses extensively this issue with the obligation of ministries, departments and agencies (MDAs) to demand for the eTCC of the individual resident in the state it has dealings.”
By implication, henceforth, Ogunsanwo noted that any resident who failed to obtain his/her eTCC might not be able to apply for government loan; register motor vehicle; apply for certificate of occupancy; change ownership of vehicle and might not be allowed to vote or be voted for.
He added that any resident who did not meet eTCC requirement might not be able to apply for transfer of real property, firearms license, foreign exchange, award of contracts, approval of building plans, allocation of market stalls and registration of limited liability company among others.
Also at the conference, Akinkunmi disclosed that the tax agency ranked a whopping sum of N24.5 billion in the coffer of the state in January as the internally generated revenue (IGR)
The finance commissioner explained that the era of tax evasion in the state was over as government has put machinery in place to aggressively enforce the tax law in order to shore up revenue.
Akinkunmi said this current government has issuing policies aimed at aligning the economy with these goals, which would set the state on a path to growth and stability as evidenced by the major developments implemented by LIRS.
According to him, the N24.5 billion revenue generation by LIRS in January amounted to 98 per cent budget performance for that month and recording 12 per cent growth from the same period in 2014.
He added that despite the harsher economic terrain presented in 2015, the state managed to realise increased revenue, off the back of collections from taxpaying members of the public, adding that in 2015, the LIRS had contributed 79 per cent to IGR in 2015.
“This equated to 56 per cent of the state’s total revenue, including Federal Transfers. The total revenue achieved in 2015 was just short of N400 billion and is expected to continue growing, driven by strong tax collection.
“This administration has been able to make significant investment in security apparatus across the state and has provided street-lighting across the state. We are reducing costs through investment in technology which is a powerful tool for cost reduction through efficient administration.”
Also speaking, Kazeem, the state’s attorney-general warned that the era of people evading tax in Lagos was gradually coming to an end as government would expand the tax net to cover lots of the working population.
The state attorney-general said the state government would now begin aggressive enforcement of the tax law and go after tax evaders and ensure that they were prosecuted and sent to jail.
He stated that the state government would set up a Rapid Tax Prosecution Unit to partner the LIRS to prosecute tax offenders in court, adding that: “tax dodger, watch out, we will get you.”