By Anthony Nwachukwu
The Federal Government has given BUA Industries Limited seven days to reconcile the issues arising from its failure to meet income tax regulations and remittance of VAT returns or pay the sum of N198.7 billion.
The ultimatum was contained in a Federal Inland Revenue Service (FIRS) letter of September 19, 2023 with reference number BBMSTO/RPP/22380531-0001 and addressed to the company’s managing director, which was recently leaked to the media as the agency considers for enforcement.
Titled, “BUA Industries Limited Non-Compliance To Income Tax Laws And Vat Returns Remittance,” the directive originated from FIRS’ Bar Beach Micro and Small Tax Office and signed by Officer II Tax, Khalid A. B., and Senior Manager Tax, Onwunali, I. C.
According to the directive, the tax service would be compelled to utilise Section 65 (1) of the CITA and Section 18 of the VATA for tax calculation purposes if the company does not provide the requested documents.
It emphasised that following the expiration of the seven-day ultimatum, the tax service would proceed to convert the tax calculation into a tax liability and subsequently issue an assessment based on the computed amount, without any additional opportunity for recourse.
“We refer to our non-compliance letters that were dispatched and duly acknowledged by the company on 23 March 2023 (1 letter), 9 May 2023 (2 letter), 29 August 2023 (3 letter) and the minute of reconciliation meeting held on 30 August 2023,” the letter read.
“Kindly note that your failure to provide the documents requested have left the service with no other option than to apply the provisions of Section 65 (1) of CITA and Section 18 of the VATA to compute tax as per attached.
“You are hereby given seven days to respond if you disagree with our position, otherwise the service will translate the tax computation into tax liability and raise as computed and attached assessment without further recourse to you.”
BUA Cement PLC had recently trended on social media, especially X (formerly Twitter) following its announcement to reduce the price of its cement to N3,500 per bag, down from about N5,000 per bag, effect from Monday, October 2, 2023.
Faulting FIRS’ resolve, however, BUA Group stated that the N198.7 billion being demanded as estimated tax for 2022 was laughable since, in its communications, it had categorically explained that the alleged N1 trillion turnover, which was FIRS’ basis in arriving at the alleged tax estimate, never existed in its books, which are available for all to see.
Attaching both copies of the FIRS letter dated 19th September and their reply dated 25th September, the company wondered why those who leaked the FIRS letter forgot to leak its reaction, if not for mischief.
It further clarified that the alleged ultimatum was a deadline to respond to inquiry rather than to make payment, as alleged in the media report, which it described as a gross misrepresentation of what transpired in the exchanges between both organisations.
