In a dramatic escalation of Kano State’s campaign against tax defaulters, authorities have sealed the headquarters of Max Air Limited, one of Nigeria’s leading airlines, over an alleged N190 million in unpaid taxes. The closure, executed by the Kano State Internal Revenue Service (KIRS), marks a significant moment in the state’s intensified efforts to recover outstanding tax liabilities spanning from 2012 to 2017.
The enforcement action against Max Air, owned by prominent businessman Dahiru Barau Mangal and connected to political heavyweight Senator Rabi’u Musa Kwankwaso through family ties, represents just one part of a broader crackdown on tax delinquency in Kano State. The airline’s sealed headquarters stands as a stark reminder of the state’s newly aggressive stance on tax compliance.
Madam Ibrahim Abdullahi, Director of Debt Management and Enforcement at KIRS, detailed the agency’s exhaustive attempts to resolve the matter through diplomatic channels before resorting to closure. According to Abdullahi, the agency issued multiple correspondences to Max Air seeking settlement of their Pay As You Earn (PAYE) tax obligations, but these attempts at dialogue were met with silence, ultimately forcing the agency to seek legal intervention.
The enforcement sweep extended beyond the aviation sector, with KIRS simultaneously targeting other major businesses in the state. Dantata and Sawoe Construction Company found its offices along Zaria Road sealed over N241 million in outstanding PAYE and withholding tax liabilities from 2021 to 2022. Northern Rice and Oil Milling Nigeria Ltd in Gunduwawa Industrial Estate also faced closure for similar infractions.
This coordinated enforcement action reflects Kano State’s determination to reduce its dependence on federal allocations by optimizing internal revenue generation. The move against high-profile businesses sends a clear message about the state’s commitment to enforcing tax compliance across all sectors of its economy.
The timing of this crackdown is particularly significant as states across Nigeria grapple with financial challenges and seek to expand their revenue bases. Kano’s approach to tax enforcement could serve as a template for other states facing similar challenges with tax compliance among major corporations.
The closure of Max Air’s headquarters carries additional weight given the airline’s prominence in Nigeria’s aviation sector and its owner’s connections to significant political figures. Dahiru Barau Mangal’s relationship with Senator Kwankwaso, the New Nigeria People’s Party (NNPP) national leader and former presidential candidate, adds a political dimension to what state authorities insist is purely a matter of tax enforcement.
KIRS has emphasized that their actions are not targeted at specific individuals or companies but rather represent a systematic approach to recovering outstanding tax liabilities. The agency’s commitment to improving the state’s internally generated revenue has led to increased scrutiny of corporate tax compliance records and more aggressive enforcement measures.
The scale of the unpaid taxes, spanning multiple years in Max Air’s case, highlights potential systemic issues in corporate tax compliance and collection mechanisms. The situation raises questions about how such significant tax liabilities were allowed to accumulate over extended periods and what measures might be needed to prevent similar situations in the future.
As of the reporting time, representatives from Max Air and the other affected companies had not provided official responses to the enforcement actions. The silence from these major business entities leaves open questions about their perspectives on the tax disputes and any potential challenges to the state’s calculations of their liabilities.
The broader implications of this enforcement action extend beyond immediate revenue recovery. By taking decisive action against prominent businesses, Kano State is setting precedents for tax enforcement and demonstrating its willingness to pursue high-profile cases. This approach could influence tax compliance behaviors across the business community and potentially impact the state’s business environment.
The situation also underscores the delicate balance state governments must maintain between aggressive revenue generation and maintaining a business-friendly environment. While tax enforcement is crucial for state development, the method and timing of such actions can have significant implications for business operations and investor confidence.
As this story continues to develop, the resolution of these tax disputes could provide valuable insights into the effectiveness of state-level tax enforcement strategies and their impact on business operations. The outcome may influence how other states approach similar challenges in their quest to enhance internal revenue generation while maintaining positive relationships with the business community.
