The Lagos State Government said on Wednesday that at least 5.3 million residents of the state do not pay their taxes.
As such, only 2.7 million residents of the state are left to shoulder the heavy tax burden.
The Special Adviser to Governor Babatunde Fashola on Taxation and Internal Revenue, Abimbola Shodipo, who made the revelation at a news conference in Lagos, said the the total number of taxable adults in Lagos are eight million but only 2.7 million pay taxes.
Shodipo desacribed this practice as unfair, especially at a time when enormous resources are needed to prosecute numerous projects.
Shodipo, who disclosed that the state is now forced to embark on aggressive revenue drive through enforcement of tax payment, said it would no longer be business as usual.
He added: “A few cannot keep funding all of us.”
According to the special adviser, the state will, with immediate effect, begin to arrest and prosecute all tax defaulters, including failure to deduct personal income tax and failure to remit income tax after deduction from employees.
Shodipo said the state will no longer entertain any request for waivers on levy/concession, stressing that the responsibilities of the state has increased without a corresponding increase in the source of fund.
The Chairman of the Lagos State Internal Revenue Service, Tunde Fowler, said Lagos is by no means bankrupt, adding that under the new tax administration, the state has reduced personal income tax to one per cent for those earning less than N305,000 per annum.
He said that in 2010, 340 corporate organisations were ‘distrained’ and N952,503,118.38 million recovered.
Fowler said in 2011, 270 companies were also distrained, leading to the recovery of N382,015,922.35 million, bringing total recovered money from taxes in the last two years to N1.334 billion.
Fowler said the penalty for failure by a banker to render returns, books, documents and information on demand within seven days will be liable to a fine of N500,000 for corporate organisations and N50,000 for individuals.
Besides, failure by banker to render information about new customer within seven days will be liable to a fine of N500,000 for corporate organisations and N50,000 for individuals.
Fowler said: “Failure to keep books of accounts (N500,000 corporate, N50,000 individuals); failure to deduct or remit tax (10% of tax not deducted/remitted plus interest at CBN monetary policy rate); failure to file returns by employers (N500,000 corporate, N50,000 for individuals); failure to demand and verify Tax compliance Certificate (N500,000 or three years jail or both); failure to comply with provision where there is no specific penalty (N5,000 in the first instance and N100 for every day); making incorrect returns, N20,000; making false statement and returns N500,000 corporate, N50,000 individual and imprisonment for six months; false statement by persons in relation to tax payable or repayable, N10,000 or imprisonment not more than six months; offences by authorised and unauthorised persons, N100,000 or three years imprisonment or both.”