EFCC Investigates Auto Firms Over Tax Evasion


Auto firms in Nigeria are on the radar of the Economic and Financial Crimes Commission (EFCC) as the anti-graft agency has vowed to fish out those that may have been short-changing the government in tax payment.

Auto firms under investigation in the first phase of the exercise are those that have been in the business for decades.

In a two-page document signed by the EFCC’s Head of Operations, Mr. Ahmad Abdulrahman, EFCC is requesting each of the firms to furnish it with all documents relating to financial transactions, including workers’ salaries between January 2006 and December, 2010. It specifically demanded receipts for the transactions, cash book, invoices and their local purchasing orders for the period.

Others are the evidence of payment of income tax, education tax (where applicable), remittance of withholding taxes deducted, VAT remittance and Pay-As-You-Earn.

It also asked for their bank statements/bank reconciliation statements; income tax returns and capital allowance computation; the payroll of all workers, letters of employment and evidence of deduction and remittance of the PAYE.

Documents showing other financial matters as they affect the workers being sought for were the National Housing Fund returns, National Health Insurance Scheme returns and receipts and the Pension Commission returns

It also asked for their certificates of incorporation, names of directors, details of their remuneration and minutes of the directors’ meetings, annual general meetings and extra ordinary meetings.

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Reacting to the development, a managing director of one of the affected auto firms, who did not want his name mentioned said, “the activities of the multiple regulatory agencies are a threat to our business. The latest action of the EFCC does not provide a good environment for legitimate auto business to thrive.

“How can they be requesting for over 20 different documents for five years? It is a deliberate effort to make things difficult and create a fertile ground for bribery and corruption.”

But the spokesman for EFCC, Mr. Femi Babafemi, denied that the exercise was for witch-hunting, stressing that it was aimed at ensuring that no company defaulted or short-changed the government in tax payments.

It was also to expose all forms of money-laundering, he added.

The Head, Corporate Affairs, Toyota Nigeria Limited, Mrs. Bukky Ogunnusi, when contacted, said she was not aware of the EFCC’s investigation, but “we have always paid the required taxes and do not engage in under the table deal.”

—Daniels Ekugo