State Govts Slam Commercial Banks Over Tax Evation

By Tosin Olatokunbo

State governments in the country are clamping down on commercial bank in the country over their refusal to pay tax. Deposit banks, sources say, are owing state government several billions of naira which they have refused to pay up.

Last month, Kaduna state sealed some commercial banks after they cumulatively owe the state over N300 million. The state said then that it had to take the decision in order to force the recalcitrant banks to meet their tax obligations.

In spite of this, according to checks by the magazine the banks are yet to clear the tax arrears, and are still discussing with the state on how to get a soft landing, even as other states have started taking similar measure against the banks.

The latest is Niger state which have also wielded the big stick on eight banks for failure to perform their tax obligations.

The state listed Polaris Bank Limited, Stambic IBTC and six others as perpetual tax defaulters who have refused to pay what they owe despite several pleadings for them to do so. The state has therefore shut down the commercial banks branches in the state until they pay up a cumulative N446 million.

Other banks who have entered the black book of the state are  UBA, N68.9 million; Union Bank, N47.1 million; First Bank, N45.7 million; Heritage Bank, N31.5 million; Unity Bank and GTB were charged for owing N14 million and N8.2 million respectively. Also, Stanbic IBTC Bank, is owing the state N113.2 million AND Polaris Bank, N74.8 million, tax arrears.

Speaking on the issue, the chairman of the state revenue Board, Mohammed Madami Etsu, said the state government had no other option.  According to her “the exercise was carried out in line with the provisions of the relevant tax laws.”

Recall that the Kaduna State Internal Revenue Service, KSIRS sealed the head offices and other branches of four banks in Kaduna in August over N300.5 million unpaid taxes.

KADIRS Executive Chairman, Zaid Abubakar, listed the debtor banks as First Bank, Access Bank, Guaranty Trust Bank and Sterling Bank.

Abubakar told journalists after the exercise in Kaduna that the money was arrears of taxes payable on masts, towers, and Very Small Aperture Terminals from 1999 to 2020.

He said that the tax liability of First Bank was N132.6 million; Access Bank N84.1 million; GTB N23.5 million and Sterling Bank of N60.3 million.

He explained that the state government took the action based on the power vested on KADIRS by Section 104 of the Personal Income Tax Act.

“We have sent demand notices several times as required by law, but the banks refused to come forward to pay taxes due to the state. For example, we have sent six notices to First Bank, four each to GTB, Access Bank and Sterling Bank.

“KADIRS is left with no choice than to seal up the banks’ branches. There is, however, a positive response from the affected banks. They have made part payment and signed commitments to settle the outstanding,’’ Abubakar said.

Meanwhile, close sources in some commercial banks informed the magazine that the banks are facing hard times and are just recovering from the COVID 19 headwind. The problems, some banks complained, is also worsened due to multiple taxations from all levels of governments.

“We pay tax to Federal Government, State Governments apart from other informal peoples who collect taxes from us. I think these taxes needed to be streamlined so as not to be too burdensome to the business owners,” an Executive Director in one of the tier one banks, told the magazine even though he pleaded anonymity because he dosent what his bank to be ‘profiled’ by the authorities.