Lagos State Government Declares Intention To Tax Companies' Profit

The Lagos State Government has indicated its intention to start demanding for a share of the profits declared by companies operating within the state, saying this would go a long way to enhance the living standards of residents of the state.

It also reasoned that since the state government provides the necessary infrastructures that enable these companies make profit, it is only equitable that the latter should contribute a part of their profit for the provision of such amenities.

The Governor of Lagos State, Mr. Babatunde Fashola gave an indication to this effect in his address at the 5th Tax Stakeholders’ conference in Ikeja Tuesday.

He however, did not state how the state government would go about this; whether by imposition of fresh taxes and levies on companies or by asking for a share of the companies’ income tax paid by such corporations to the Federal Government.

Addressing stakeholders at the meeting, the governor highlighted the fact that it is only individuals resident in the state that pay income tax to the state government.
He also lamented the fact that companies operating within the state by law pay income tax to the Federal Government and come back to enjoy the amenities provided with individual taxpayers’ money.

According to him, it would only be equitable if companies operating within any state start contributing part of their profits for the provision of social amenities.
Fashola insinuated that if he could lay his hands on part of profits declared by companies in the state, the standard of living of Lagosians would be higher than what it is presently.

“I wish I could lay my hands on some of the billions of Naira profit declared by these companies in my jurisdiction. But may be subsequently, through amendment of existing tax laws it will be possible if you permit us to do so.

“It is only fair that to whom much is given, much is expected and that and that the greatest share is given to the greatest contributor,” Fashola said.

The Personal Income Tax Act (PITA) as amended mandated individuals to pay taxes on their incomes to the governments of the states where they reside while the Companies’ Income Tax Act (CIT) directed companies to pay income taxes on their profits to the Federal Government.

The governor was also hard on companies that usually fail to remit taxes deducted from their workers’ salaries accordingly and later divert same into funds for donations other Corporate Social Responsibility (CSR) activities.

Such companies according to him,   are thieves; stealing from not only government but also the poor workers in their employment and using part of the proceeds to paint themselves as socially responsible corporation citizens.

“These companies call it Corporate Social Responsibility after stealing from both the government and their employees,” Fashola said.

Source: ThisDayLive