TAX NEWS - June 2010

U.S. Tax: Reps To Probe $16m Tax Evasion, House Sale In U.S.

Members of the House of Representatives on Thursday mandated the Committee on Foreign Affairs to commence probe into the Federal Government's failure to pay about $16 million tax due its mission house in New York, United States.

The committee, according to a resolution of members in plenary, is to also investigate the rationale behind the sale of the country's mission house in Washington, with a view to determining the whereabouts of the proceeds.

During consideration of a motion entitled Nigeria's tax default in New York, members regretted the failure of government to pay up the taxes that left the U.S. authorities with no option than drag Nigeria to court.

Stanley Ohajurika (PPA, Abia) tried in vain to discourage the House from debating the issue since it was still pending in court.

In his lead debate, Halims Agoda (PDP, Delta) said unless something was done urgently to comply with tax regulation requirements of the U.S. the country's relationship with America would continue to dwindling.

"Dear colleagues, the House is disturbed that the authorities of New York City, frustrated by delays in payment ostensibly after demands over a number of years, have now dragged the Nigerian Government to a Federal High Court.

"We are aware that the action of the Nigerian Government in failing to pay taxes on its New York property is a negation of the commitment of government to promote the good image of the country.

"Disappointed that the Nigerian Mission was aware of the New York taxation policy on use of buildings for commercial purposes and its deliberate refusal to pay, this has led to accumulation of a whopping sum of between $1.4 million to $16 million in real estate taxes and interest," he explained.