CASE DIGEST - TAX: PERSONAL INCOME TAX IS DETERMINED BY STATE OF RESIDENCE

LONGE MEDICAL CENTRE; DR. SAMUEL OLANREWAJU BADANKI v. ATTORNEY GENERAL, OGUN STATE; INTERNAL REVENUE SERVICE,OGUN STATE

COURT OF APPEAL (NIGERIA)
(IBADAN DIVISION)

(BADA; TSAMMANI; OJO, JJ.CA)

On the 28th of September 2011, Ogun State Internal Revenue Service (2nd Respondent) invaded and locked up the premises of Longe Medical Centre (1st Appellant) a health institution registered with the Lagos State Private Hospital Registration Authority and managed by the 2nd Appellant, on the ground that the employees were residents of Ogun State and as such, the Personal Income Tax of the 2nd Appellant and other employees of the 1st Appellant should be paid to the 2nd Respondent in accordance with Section 2(2) of the Personal Income Tax Act. Prior to the invasion and locking up, the 2nd Respondent alleged that it had persistently demanded to no avail, that the Appellants pay their tax liability to the 2nd Respondent.

e Appellants in response vigorously maintained that it was not a resident in Ogun State and as such does not have a liability to pay tax to the 2nd Respondent, and its liability was to the Lagos State Internal Revenue Service. He pointed out that their employees were residents in Lagos State which fact he said was not controverted by the 2nd Respondent. He contended that the duties of the 2nd Respondent are restricted to individuals resident in Ogun State and they had no powers to enforce payment of tax on the 1st Appellant and its employees. He submitted further that the act of the 2nd Respondent in invading and closing down the hospital facility of the Appellants was a violation of their rights.

The trial court considered the arguments posited by both parties and upon the same, dismissed the application of the Appellants on grounds that the Appellants failed to establish their case as required by law and lacked merit. In this wise the trial Court awarded costs in favour of the 2nd Respondent.