Eight states may sue electricity firm over N6.5b unremitted taxes

IN the face of liquidity crunch which has hit many states in the country, no fewer than eight of them have threatened to drag the Nigeria Electricity Liability Management Limited (NELML) to court over N6.5 billion unremitted Pay-As-You-Earn (PAYE) and Withholding Tax (WT) being taxes deducted from salaries of disengaged members of staff of the defunct Power Holding Company of Nigeria (PHCN) and not remitted to the coffers of the affected states.

The Guardian learnt that the states resolved to institute legal action after all peaceful means to recover the money was not yielding positive dividends from the management of NELML which acquired the defunct PHCN.

The states are owed unremitted taxes ranging between N139 million to N2.5 billion. The affected states are Abia (N417.08 million), Adamawa (N139.30 million), Benue (N410.75 million), Delta (N2.59 billion), Kaduna (N759.39 million), Ogun (N1.26 billion), Osun (N601.93 million) and FIRS (N285.49 million).

It was learnt that the office of the Joint Tax Board has intervened to facilitate payment of the money to the affected states without further delay.

The recovery of the money collected on their behalf is said to be more imperative for the states in view of their state of insolvency and urgent need to generate fund to settle workers’ salaries, pensions and gratuities in their respective states.

When contacted for comment, the Acting Chairman, Osun State Internal Revenue Service, Mr. Dayo Oyebanji, who confirmed the development, said that Osun is being owed N601, 926,925.81, which he described as huge, adding that the amount could have assisted the government to offset part of its financial debt, salaries, pensions and other obligations to workers.

He said that efforts have been intensified through the Joint Tax Board (JTB) to intimate the NELML, which acquired the defunct Power Holding Company of Nigeria (PHCN) on the backlog of debt.

His words: “We are very much aware of the PHCN non-remittance of the PAYE deducted from their members of staff on behalf of the state governments before it was privatised by the Federal Government. It is a must for the companies /ministries/ agency/ parastatals to remit PAYE deductions on monthly basis in accordance with Section 76(4) under Personal Income Tax Act.

He, therefore, appealed to the NELML to expedite action on the payment before the full weight of law is applied.