honeric01:

I feel like laughing at this, how do you make someone declare his or her income you mean a tax officer wouldn't know how to do that facing his or her client one on one in the IRS office

Lol . . . you are free to laugh. I did ask the questions because I wanted answers. Yes, how do you get someone who comes in the door to declay income that he did not declare prior? I mean the FIRS agents likely don't know what the persons income is and only suspect that because he drives a luxury car, means he likely makes more. How do they, by causing him to show up at their office, cause him to declare his/her income then? Are you saying FIRS agents have interogation skills that could yield that information?

@kobojunkie
You make me laugh too,it means you are new to taxation,
let me break it down for you, now to prove your income is a Term  institutions often use here to valuate howmuch you are taxed, now if I want a police officer to prove his/her income all  they have to do is produce thier pay slip for the last financial year and you can calculate howmuch tax they have paid to the govt,once you see that as a tax officer  then you let them go cos they are clear,Now if you own your own Biz  then you are adviced to bring in your Books, that includes all your financial books, bank stats, purchase ledger,expenditures etc, payment ledger for staffs so on, all them books would tell the tax officer howmuch you earn  and they can deduce tax from it,Now witht he private Biz, it dont have to come to that, thats why as a Biz man you got to register your company with an accountant who sorts all that out for you  and you pay a fee to them, do you now understand?

I don't see why there is really so much noise about the tax. If LAGOS state deserves to be paid tax, people will pay it. LAGOS state does not deserve shit. They have not done anything to get any tax. Please let anyone not make noise about useless flowers that are being planted ooo. It is the govts responsibility to do this. How do you compensate Lagosians for all the tax that has been paid for over 45yrs without them seeing any benefits.

All of a sudden, you start planting flowers and everyone must take tax. Why don't you refund the taxes paid pre-fashola since they weren't used for anything tangible.

I see bad roads everyday in Lagos, there are numerous places without public water. Even when they have water, there are no meters to accurately determine usage. Lagos PWS reaps people off with fixed charges. Traffic is terrible. I dont know what you people see in this govt. All i see is noise and beautification. Of what use is it to me, a lagos resident, that Victoria Island, Lekki, and Marina are beautiful while the other areas (where 80% of lagosians live) are neglected.

phuck_NL:

Lagos PWS reaps people off with fixed charges.

Word !!!
Those guys are #@*!

erico2k2:

@kobojunkie
You make me laugh too,it means you are new to taxation,
let me break it down for you, now to prove your income is a Term  institutions often use here to valuate howmuch you are taxed, now if I want a police officer to prove his/her income all  they have to do is produce thier pay slip for the last financial year and you can calculate howmuch tax they have paid to the govt,once you see that as a tax officer  then you let them go cos they are clear,Now if you own your own Biz  then you are adviced to bring in your Books, that includes all your financial books, bank stats, purchase ledger,expenditures etc, payment ledger for staffs so on, all them books would tell the tax officer howmuch you earn  and they can deduce tax from it,Now witht he private Biz, it dont have to come to that, thats why as a Biz man you got to register your company with an accountant who sorts all that out for you  and you pay a fee to them, do you now understand?

Thank you for using your PRECIOUS time to point this easy "how" to kobojunkie

erico2k2:

@kobojunkie
You make me laugh too,it means you are new to taxation,
let me break it down for you, now to prove your income is a Term  institutions often use here to valuate howmuch you are taxed, now if I want a police officer to prove his/her income all  they have to do is produce thier pay slip for the last financial year and you can calculate howmuch tax they have paid to the govt,once you see that as a tax officer  then you let them go cos they are clear,Now if you own your own Biz  then you are adviced to bring in your Books, that includes all your financial books, bank stats, purchase ledger,expenditures etc, payment ledger for staffs so on, all them books would tell the tax officer howmuch you earn  and they can deduce tax from it,Now witht he private Biz, it dont have to come to that, thats why as a Biz man you got to register your company with an accountant who sorts all that out for you  and you pay a fee to them, do you now understand?

Huh

I have to tell you that the above is not even what is being discussed here.  Do you mind reading what the poster I was responding to actually posted, first, and then post a response based on that please.  
Just so you know, I own a  business and have years of experience dealing with tax agents n and have been through an audit or two myself in the last 6 years alone.

Kobojunkie:

Huh

I have to tell you that the above is not even what is being discussed here.  Do you mind reading what the poster I was responding to actually posted, first, and then post a response based on that please.  
Just so you know, I own a  business and have years of experience dealing with tax agents n and have been through an audit or two myself in the last 6 years alone.

And you think taxation matter is only reserved to you? the rest of us don't deal with tax officers we don't have biz too eh?

If this is true, i think Lagos is now starting to shoot itself at the foot like bunny.
They have been doing well, and now to tax such will be ridiculous, there are so many other ways to make sure they generate funds and taxing rides of this sort of not one of them.
They seems to be getting drunk with power and power has a way of killing

honeric01:

Thank you for using your PRECIOUS time to point this easy "how" to kobojunkie

Oh come on now, you are not now going to tell me that your assertion that the attempt to "DUPE" people into believing he/she might have to pay taxes on a luxury car , was all about getting them to the FIRS office to declare their assets, is exactly what enrico2k dude outlined above. Please don't.

FIRS agencies do not have to DUPE people by claiming to tax their luxury cars as ways of getting them to declare their assets. The guy in question already did only that because he happens to own what they consider a luxury car, the FIRS agents in this case suspect he may have more money somewhere they are not privy to and in attempt to get more, are looking to tax his luxury car. Even if the guy came in today to show them exactly the same papers he already did back in 2006-2008 review, there is NO WAY for them to find out more than that unless they do their own investigation, and owning a luxury car should not be reason why he ought to be charged more tax.

honeric01:

And you think taxation matter is only reserved to you? the rest of us don't deal with tax officers we don't have biz too eh?

Never said that!!! Wondering if you bothered to read what eric02 actually posted considering the first line has him asking if I am new to taxation. Can we now have you answer the questions or am I wasting my time here?

@kobo, abeg, read the poster article again, maybe you are missing something there.

Kobojunkie:

Never said that!!! Wondering if you bothered to read what eric02 actually posted considering the first line has him asking if I am new to taxation. Can we now have you answer the questions or am I wasting my time here?

Bro, i don't have to give you an answer to what you already know, it's an opened thing, the reason for the taxing the luxury car, why is hers the only one that was taxed? did you have think about the motives? are you sure she has not been dodging from the tax officers? are you sure she even paid the said taxes she claimed she paid to the right authorities?

Sure @honeric1, lets read it again




[size=14pt]Slams N0.62m tax on luxury car[/size]


In what appears to be a new  strategy devised to lure every taxable Lagosian to declare their earnings for personal income tax, the Lagos State Government through its Internal Revenue Service (LIRS) has started taxing luxury cars.


This approach, Business Day authoritatively gathered from the LIRS which is their best of Judgment approach targets using Lagosians expenditure to evaluate their earnings/income, thereby administering personal income taxes on them.

The LIRS had written a letter signed by one Hakeem Abiru, coordinator (informal sector 1), to a Lagosian (name withheld) a copy of which was made available to BusinessDay seeking the payment to tax liabilities to the tone of N627,899.25 kobo on her new car (Toyota Rav 4 Jeep) with a stated registration number.Part of the letter dated September 11, 2009 states: “Ref: Personal Income Tax Matters. Demand Notice on Liabilities for years 2006-2008.  


“Further to our earlier letter dated 10th June, 2009 duly served on you on 24th of June, 2009 in respect of your new car (Toyota Rav 4 Jeep) with registration number …, your failure to respond to the above letter within the statutory time limit has since rendered this assessment notice final and conclusive by virtue of section 66 of Personal Income Tax Act Cap 8 LFN 2004.



“Accordingly, and pursuant to section 76(1) and 77 of the same act, you are required by law to effect payment of the assessed liability N471,750:00 plus 10 percent penalty (N47,175:00) and 21 percent interest (N108,974:25) totalling N627,899:25 (Six hundred and twenty-seven thousand, eight hundred and ninety-nine naira, twenty-five kobo only) within seven (7) days from the date of service of this demand notice to Government coffers through any of the designated banks without further delay using the following codes: Agency Code: 4250003; Revenue Code: 4010002. Failure to comply with the above, this office will not hesitate to impound the vehicle involved and also prosecute you to enforce payment.”  



Section 38 of the Capital Gains Tax Act (LFN 1990) which made provision for Motor Cars states that “a mechanically propelled road vehicle constructed or adapted for the carriage of passengers shall not be an asset for the purpose of this Act unless it is a vehicle of type not commonly used as private vehicle and is unsuitable to be so used.”  


When BusinessDay reached Abiru on phone through the corporate communications department of LIRS to confirm if the letter actually emanated from his office, he affirmed its authenticity, saying the letter targets bringing the owner of the car to declare his or her income.


When BusinessDay contacted some tax experts on the new dimension to tax drive taken by Lagos State to evaluate residents’ earnings, Eben Akinyemi, partner, Tax Ideas, noted that it is within the rights of the LIRS to assess people to tax on their best of judgment. According to him, “such judgment could be based on the expenditure of the tax payer. In this instance, expenditure would be seen to demonstrate earnings/income.”


He, however, queried the rationale for taxing a car or the threat to impound the vehicle as contained in the letter. “No tax is payable in respect of a car in itself because
the owner must have paid customs duties, Value Added Tax (VAT), import duties, licensing permit. There is no personal income tax or capital gains tax attached to vehicles. What basis should the LIRS impound the vehicle in question?” Akinyemi said.


According to the tax expert, the car itself should not be assessed to tax based on the law. “The car may be used as a basis to estimate a best of judgment assessment of the owner’s income, but the car itself is not liable to tax under Personal Income Tax Act (PITA) or Capital Gains Tax Act (CGTA),” Akinyemi said.

He said the onus is on the person assessed to object within the provision of both Personal Income Tax Act (PITA) and Capital Gains Tax Act (CGTA).
“Firstly, where someone buys an asset out of his savings on earnings on which proper tax has been paid, no further tax should be payable on the income. This would typically apply to those in paid employment, whose employers had deducted Pay As You Earn (PAYE) in their income. Here, any issue relating to additional assessment should be raised with the employer. Secondly, in the case of a housewife who has no income of her own, whatsoever, and then receives a gift or an asset from her husband or relative, this should definitely not fall under the ambit of Personal Income Tax Act (PITA) because gifts are subject to tax under Capital Gains Tax Act (CGTA). Specifically, Section 39 of the CGTA (2004 LFN) exempts motor cars from Capital Gains Tax.
Section 40 of CGTA (2004 LFN) also exempts gifts and disposal of gifts.



Akinyemi stated: “PITA however requires every one to file tax returns. It does not exempt the unemployed. Also Section 37 of PITA (LFN) imposes a minimum tax of 0.5 percent of total income on any one with no chargeable income. Therefore, there is no income. 0.5 percent of total income will yield a nil tax.”  
Section 39 of Capital Gain Tax Act (LFN 1990) which also provides for gifts stated: “Subject to the provision of this Act, where a person disposes, by way of gift, an asset acquired by him by way of a gift or otherwise (not being an acquisition on a devolution on death), the person making the disposal shall not be chargeable to capital gains tax under this Act by reference to that disposal. In this section, GIFT has the same meaning as in section 7 (2) of this Act.”

@Kobo, i am not against the taxes parse, however, it depends on how they go about it, and the taxes is not to be done by seizing the rides of the people and slap them with such nonsensical fines of taxes, where were the tax collectors when the person was registering the rides, where were they when the duty was being paid.
I will expect that duty means, paying all applicable charges and taxes ought to have been one of them.

Fhemmmy:

@Kobo, i am not against the taxes parse, however, it depends on how they go about it, and the taxes is not to be done by seizing the rides of the people and slap them with such nonsensical fines of taxes, where were the tax collectors when the person was registering the rides, where were they when the duty was being paid.
I will expect that duty means, paying all applicable charges and taxes ought to have been one of them.

I am not against people paying their taxes either. Just wonder how seizing my car will help the state get me to pay my taxes when all it has is that I have a luxury car. As stated most cars already have applicable taxes paid for so why go after my car again for taxes?

THIS IS THE REASON WHY HER CAR WAS SERVED THAT TAX ACCORDING TO THE ARTICLE,

In what appears to be a new  strategy devised to lure every taxable Lagosians to declare their earnings for personal income tax, the Lagos State Government through its Internal Revenue Service (LIRS) has started taxing luxury cars.  


Notice that the tax was given to her a long time ago, not now, so if she claimed she's paid up all the taxes on the car, then why is it coming up now? if she has all the right papers, then she wouldn't be in this mess, if she's been paying her income tax, then they wouldn't have used her car to lure her into declaring her assets i think,   so bottom line is that, they are using this medium to:

In what appears to be a new  strategy devised to lure every taxable Lagosians to declare their earnings for personal income tax, the Lagos State Government through its Internal Revenue Service (LIRS) has started taxing luxury cars.  

Kobojunkie:

I am not against people paying their taxes either. Just wonder how seizing my car will help the state get me to pay my taxes when all it has is that I have a luxury car. As stated most cars already have applicable taxes paid for so why go after my car again for taxes?

we are on same page then.

honeric01:

THIS IS THE REASON WHY HER CAR WAS SERVED THAT TAX ACCORDING TO THE ARTICLE,

In what appears to be a new  strategy devised to lure every taxable Lagosians to declare their earnings for personal income tax, the Lagos State Government through its Internal Revenue Service (LIRS) has started taxing luxury cars.  


Notice that the tax was given to her a long time ago, not now, so if she claimed she's paid up all the taxes on the car, then why is it coming up now? if she has all my right papers, then she wouldn't be in this mess, if she's been paying her income tax, then they wouldn't have used her car to lure her into declaring her assets i think,  so bottom line is that, they are using this medium to:

In what appears to be a new  strategy devised to lure every taxable Lagosians to declare their earnings for personal income tax, the Lagos State Government through its Internal Revenue Service (LIRS) has started taxing luxury cars.  

Income taxes are not really to declare what someone worth, it is ought to tax income and that is why it is called income tax.

what i don't support in this article is that, i don't want them to seize the car because she's not been paying her tax, she rather be made to face the law according to the tax law than using unlawful means,  that's all i have to say.

honeric01:

what i don't support in this article is that, i don't want them to seize the car because she's not been paying her tax, she rather be made to face the law according to the tax law than using unlawful means, that's all i have to say,

How do you know she is not paying her taxes? For all we know she is probably a full time wife who used her life savings to purchase the car, and paid the VAT and custom duties as required.

SO CAN A TAX EXPERT THEN TELL ME WHAT HAPPENS TO SOMEONE
WHO LIVES AND WORKS ABROAD AND ONLY CAME HOME FOR 4WEEKS
OR SOMEONE WHO LIVES AND WORKS IN IBADAN WHO ONLY DROVE TO
LAGOS FOR A FUNCTION.

MY OPINION IS THAT THIS SORT OF POLICY SHOULD BE A FEDERAL ONE AND NOT FOR
THE STATE AS HOW DO U THEN DETERMINE WHO LIVES IN LAGOS IF PEOPLE THAT
LIVE IN LAGOS START REGISTERING CARS IN OYO OR OGUN STATE.

THE BEST THEY CAN DO IS COME UP WITH ROAD TAX SYSTEM,WITH HIGH EMMISSION/LARGE ENGINE
VEHICLES PAYING MORE.

EXTRA REVENUE WILL BE GENERATED FROM DEFAULTERS BY CLAMPING OR IMPOUNDING VEHICLES WITH EXPIRED ROAD TAX

THE NUMBER OF CARS ON THE ROAD WILL ALSO BE REDUCED.

, THE ROAD TAX SYSTEM IN ITSELF SHOULD BE A FEDERAL POLICY TO MAKE IT FOOL-PROOF.

Lagos should look at other ways of raising revenue.
Generating it's own power would be a very good idea.

Kobojunkie:

How do you know she is not paying her taxes? For all we know she is probably a full time wife who used her life savings to purchase the car, and paid the VAT and custom duties as required.

Not even that.
We have a system in Nigeria where what you drive brings you biz, a place where you are on your own and nothing to be expected from the govt.
I would like to know how they wanna tax all those asewos in Lagos and Abuja.

Kobojunkie:

How do you know she is not paying her taxes? For all we know she is probably a full time wife who used her life savings to purchase the car, and paid the VAT and custom duties as required.

I never said she hasn't been paying her tax or that she's owing, read my post well and stop quoting me out of context, and tell me, how are you sure she's a full house wife? and how are you sure she used her savings to purchase the car? and how are you sure she truly paid VAT and custom duties to the appropriate authorities?

honeric01:

I never said she hasn't been paying her tax or that she's owing, read my post well and stop quoting me out of context, and tell me, how are you sure she's a full house wife? and how are you sure she used her savings to purchase the car? and how are you sure she truly paid VAT and custom duties to the appropriate authorities?

If that hasn't been paid, then, tell Fashola to deal with his people and not punish the woman for what has nothing to do with her.

Fhemmmy:

Not even that.
We have a system in Nigeria where what you drive brings you biz, a place where you are on your own and nothing to be expected from the govt.
I would like to know how they wanna tax all those asewos in Lagos and Abuja.

how to tax the prostitutes in Lagos is by taxing the brothels and motels based on how many prostitutes they have under them and if they are not the types that dwell in hotels, then they become illegals and be persecuted once arrested.

honeric01:

I never said she hasn't been paying her tax or that she's owing, read my post well and stop quoting me out of context, and tell me, how are you sure she's a full house wife? and how are you sure she used her savings to purchase the car? and how are you sure she truly paid VAT and custom duties to the appropriate authorities?

Not sure she is a fullhouse wife hence the reason why I ask if it could not be the case here. She was accessed taxes based on the supposed value of her car. So, the tax is question is on her car and not on her income, if that even applies.

He, however, queried the rationale for taxing a car or the threat to impound the vehicle as contained in the letter. “No tax is payable in respect of a car in itself because the owner must have paid customs duties, Value Added Tax (VAT), import duties, licensing permit. There is no personal income tax or capital gains tax attached to vehicles. What basis should the LIRS impound the vehicle in question?” Akinyemi said.

There are many what ifs here, hence the reason why this is likely to backfire and why FIRS agents cannot necessarily get accurate income data from people by simply taxing their "LUXURY" cars.

xcapade:

SO CAN A TAX EXPERT THEN TELL ME WHAT HAPPENS TO SOMEONE
WHO LIVES AND WORKS ABROAD AND ONLY CAME HOME FOR 4WEEKS
OR SOMEONE WHO LIVES AND WORKS IN IBADAN WHO ONLY DROVE TO
LAGOS FOR A FUNCTION.

Once you can prove that you don't live or work in Lagos, then they will let you go as long as you have facts to back yourself up.

Fhemmmy:

If that hasn't been paid, then, tell Fashola to deal with his people and not punish the woman for what has nothing to do with her.

 How is it fashola's issue to deal with his people? do you know what we call tax invaders

honeric01:

how to tax the prostitutes in Lagos is by taxing the brothels and motels based on how many prostitutes they have under them and if they are not the types that dwell in hotels, then they become illegals and be persecuted once arrested.

U sure are a joker, i wonder how many motel will go to the asewos and ask them for taxes based on how many people they have slept with.
BTW. . . are you aware that there are some asewos that dont use hotels?
Let us be real, i think the govt needs to be dealing with pple that truly owe taxes and stop harassing people that has nothing to give.

Most ppl dnt understnd the principle of economicss, Lagos state is widely populated nd so therefore the  govenment incure more expenses and so therefore need more moenyy in order to carry out more major projects, This tax on suv's is jus to send a signal to the rich!!!, we r coming for youu, its a progressive tax system , the more you earn the more you payy, der r too many richh ppl in  Lagos nd Lagos being the financail hurb, dey wud try to get more moneyyy to do thingss!!!!!simplee, i fink it a very good idea thoo!!!!!!, pay for traffic workerss, build more roadsss, put the basic infrstructures in placeee, revive the rail system in lagoss!!!>, so ppl dnt complainnn, ts for the benefit of a better Lagoss!!!!!

honeric01:


 How is it fashola's issue to deal with his people? do you know what we call tax invaders

I import a car into Nija.
i get a clearing agent to clear my car, he charge A naira, i paid and my car is brought to my house.
So what will be my biz with duty or VAT again? that must have been part of the payment of A naira to the clearing agent.
And if for any reason, the agent refused to pay the money and the car was delivered to me, with all original documents, who do you think is at fault, me or the people that works with the govt that look for how to milk the system and steal and make the innocent people pays for it?

That is what i mean by dealing with his own people.

Where i live, i pay taxes and i dont even see the money before the taxes is paid and at the end of each year, i report all and they see if i pay enuf or too much.
So there are better ways to dealing with tax evader, if there are any and not taking their vehicles

youngmonie:

Most ppl dnt understnd the principle of economicss, Lagos state is widely populated nd so therefore the  govenment incure more expenses and so therefore need more moenyy in order to carry out more major projects, This tax on suv's is jus to send a signal to the rich!!!, we r coming for youu, its a progressive tax system , the more you earn the more you payy, der r too many richh ppl in  Lagos nd Lagos being the financail hurb, dey wud try to get more moneyyy to do thingss!!!!!simplee, i fink it a very good idea thoo!!!!!!, pay for traffic workerss, build more roadsss, put the basic infrstructures in placeee, revive the rail system in lagoss!!!>, so ppl dnt complainnn, ts for the benefit of a better Lagoss!!!!!

that is ludacris and i bet to disagree.
A rich man that you have refused to tax his income, you refuse to tax his investment, you refused to tax all his properties, and now you wanna tax his cars, that is a dumb system.
Like i said, there are so many ways to generate more money and such hefty fines on rides are not one of them.

It's funny how everyone agreeing with this mess is outside the country {UK to be precise}.

You are absolutely right man.  

In nigeria people actually get away with murder when it comes to paying tax.
Most of these Luxury Car Owners are tax invaders. I am also sure that 90% of them are not insured.(if not more)
These are the people that always complain about bad roads, Armed robbery to name a few.
I have no problem with the concept. It's the usuage that is my concern.
If such funds can be used for inproving our roads, Tax derived from Insurance companies via client premiums used in improving the police force
Then Kudos to FASHOLA - EKO KONI BAJE

We nigerians that are resident in the UK know the huge benefits derived from paying tax. Or do u think all the good roads, electricity and water supply, security came from Crude Oil in the Soil.

Typical Nigerians. When Fashola was clearing Oshodi, u said kudos because it did not effect u personally. Now Fashola is after you for Car tax
You are gnashing your teeth.