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Tax: firm decries illegal deductions

The management of Jothan Limited has alleged illegal deduction of tax for a contract awarded to the company by Chervon/Itsekiri Regional Development Council, IRDC to build a town hall at Eghoro community in Warri North Local Government Area of Delta State.

The company made this disclosure in a statement signed by its legal adviser, Ken Omoyebagbe.

Tax

According to Omoyebagbe, “our client was awarded a contract by Chervon/Itsekiri Regional Development Council, (IRDC) to build a town hall at Eghoro community for the cost of N37, 770,000.00, the said contract was duly executed by our client according to specification and terms of the contract in 2015.

The statement read, “Our client on carrying out its usual annual tax audit and filing of its tax return paid its company income tax (CIT) which covered all transactions of its fiscal years involved which included the year the said contract was executed by our client.

“When our client was called to the IRDC office for its final payment for the said contract, it came as rude shock to our clients when it discovered that the IRDC had deducted the sum of N3, 770,000.00, as 10 percent withholding tax from its payment on the said contract.

“On discovering this illegality, our client immediately complained to IRDC. The IRDC claimed that the deduction was made by Chevron Nigeria Limited.

“It is patent that our client being a limited liability company pays its company income tax and VAT to the federal government and such has no business whatsoever with FIRS, Delta State or any other state tax board as its regards withholding tax.

“In 2016, our client who currently through the IRDC operates a running contract through direct labour for the supply of petrol for security surveillance at Idibi field was omitted from payment of one month value of said contract totaling the sum of  N1,922,000.00,

“Our client subsequently complained to the IRDC on this non receipt of payment repeatedly to the IRDC, whose repeated response to our client has been that the said sum was not paid by Chevron.

“Our client shall commence legal action for the recovery of the said total sum if our demand are not attainted to”.


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