OAU debunks tax default claim

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Members of the University and other stake-holders no doubt are embarrassed by the event of Wednesday, 2nd May, 2018 when the Osun State Government sealed off the main gate of the University and the University Secretariat due to an alleged tax default by the University.

It has become necessary to react to the claims of the State Government and  misinformation and total falsehoods going the round in the community in the aftermath of that unfortunate incident.

In particular, the University authorities noted the claim that the University was owing N1.84bn of back-duty tax and has refused to negotiate with the Government as false, malicious and total misrepresentation of the truth on this matter.

Debunking the claims made by the State Internal Revenue Service, the University asserted that the past tax liability, which represented the sum by which the IRS claimed that the University under-deducted from staff salaries for the period 2015 and 2016 for PAYE, has been a subject of negotiations between the University and the State IRS, as the University Administration   vehemently disputed the figure of N1.844 billion submitted by the IRS and insisted that if there had been under-deduction at all, only the sum of N287 million was the amount by which PAYE was under-deducted from staff salaries.

The University Administration added that although parties were reconciling their different figures, negotiations could not be concluded on account of the last national strike of the non-teaching staff of universities which was only called off in April this year.

It is worthy of note that the Osun State Government, in a letter personally signed by the Governor to the President of the Federation, had reported the matter.  It was then directed to the Presidential Initiative on Continuous Audit in the Office of the Accountant-General of the Federation. Both the Osun State Government Tax Authorities and the University officers attended the PICA session where the matter was resolved.

The Accountant General of the Federation, after examining the claim of the Osun IRS and that of the University, by a letter reference number INV/0089/844/II dated January 19, 2018, returned the verdict that the University’s outstanding Tax liabilities was a sum of N384 million only being tersity authorities under-deducted PAYE from its staff salaries.

Parties agreed to this conclusion, and the recommendation that this sum could be paid at the monthly installment of N5 million. It is therefore with total shock that the University community woke up on Wednesday, 2nd May, 2018 to find the University Main Gate as well the University Secretariat sealed up by the Osun State Government.

Members of the public should note that the past tax liabilities of 2015 and 2016 in dispute was never deducted from staff salaries as is being erroneously claimed. The University has never failed at any point in time to remit PAYE deducted from staff salaries to the tax authorities.

It is therefore a case of under-deduction and not of non-remittance of Tax.  This anomaly has since been corrected and the university employees have been paying correct tax rates since January, 2017.

However, the Vice-Chancellor of the University has assured the University community that the matter would be resolved without delay, and that the vexed issue would not be allowed by both parties to damage the harmonious relationship between the University and the Government of Osun State.

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