See Why Tax Collectors Are After Nigerian Celebrities In 2018
Celebrities are now under the probing eyes of the tax man in Lagos.
First it was Falz, who revealed that the Lagos Inland Revenue Service(LIRS) had sent him a letter declaring that he was owing personal income tax for the whole of 2017.
Now singer Davido and comedian, AY Makun have been charged to court again for tax evasion.
While the DMW boss was first taken to a Lagos High court in July 2017, AY has become a ‘customer’ to the LIRS for allegedly dodging filing his tax returns since 2016.
Even after Davido claimed to LIRS officials that he pays his taxes to Osun state government since he is from the state, while AY said he makes his tax payments to Ondo state, the Lagos state tax collectors do not believe them.
An official of the agency who spoke to Bounce News about the AY and Davido situation said;
“They have tax consultants who are telling them what to tell the public, but they cannot tell that to LIRS.
"There is something call Residence Rule, that means you pay your tax where you are found on the first day of January. Does he have a house in Osun? Where is he usually found in the first day of the year?
“If he pays his tax in Osun, then he will have to bring a receipt. Even if he wants to travel to the United Kingdom, he will have to submit tax evidence before traveling.”
With all the events that were lined up in December last year (there were shows almost everyday from December 15 to December 31), and with other shows in coming months, LIRS certainly have a lot of work to do.
Presently, entertainers and other celebrities are already reaping the dividends of their shows from last year. For example, Davido declared half a billion Naira profit from his 30 Billion concert and bought himself a 2018 Bentley in apparent celebration.
Celebrities like Falz, Wizkid, Adekunle Gold, Seyi Shay, Mayorkun and Simi also held successful shows in December 2017, and even though they never declare their 'bountiful harvests', they are all eligible to pay tax from their profits.
So how does LIRS plan to make sure they get the tax that could help build roads and hospitals from these entertainers?
“Most of these musicians are taxed based on personal income. They get contracts from Lagos state government or from big brands.
"The truth is that they don’t collect cash as the money is paid into a bank account, and LIRS have a right to look at the account to know how much they have earned, except they collect cash then we don’t know” said the official who spoke anonymously to Bounce News.
He added that even when Nigerian musicians or comedians perform in places like the United Kingdom, they still know what they earned and deduct tax from it.
This is due to an agreement signed between LIRS and the Tax Service Providers in over 100 countries.
LIRS is certainly not playing around in 2018 and have plans of also using stealth methods to know what entertainers are up to.
“We have an intelligence unit that finds out when and where the next concerts or shows will hold. They even go as far as visiting clubs, dressed as a patrons to see who will be performing” he said.
So celebrities really have nowhere to run.
The official then went ahead to give one final warning to every celebrity who has made money within Lagos state without paying tax.
“If any celebrity does not pay his tax by June this year, he or she will face stiff fines and other penalties”.