Shortly after the Corporate Affairs Commission delisted 38,000 companies from its database, auditors and accountants have challenged the agency to give details of and reasons for its actions against the delisted firms, accusing it of lacking adequate tracking tools to monitor tax cheats.
They agreed that though it was necessary for such action to be taken, the agency should not stop at delisting, as many Nigerians, who are investors in the companies, were ignorant of the details of the action.
A fellow of the Institute of Chartered Accountants of Nigeria, Mr. Peter Adebayo, stated that the CAC should inform the public about the reasons behind its delisting the companies.
He said, “The CAC needs to be more proactive in terms of database. The public should know how long they have been registered, what time it discovered that the companies had not been filling annual returns to the commission, among others?
“If the CAC had an efficient database system,it would have identified the firms earlier, and not after five years of illegal operations of tax default. It should at least conveniently track records of companies that were not compliant in terms of returns on a yearly basis and not after five years or more.” To Adekunle Yuniz, another accountant, several life savings might not have been lost, if CAC had been proactive.
According to him, a lot of Nigerians must have invested in the firms without prior knowledge of tax default and lack of corporate governance.
He added, “It is the duty of CAC to inform the public of the true state of firms it registered. In most cases, we find out that most of these companies were just registered and abandoned by the commission. After delisting, all investments are lost with investors in the dark.
“There are more companies that do not file their returns to the commission and have yet to be delisted, because there was no database to capture them, which is synonymous with the tax management system in Nigeria. The only way to develop is to acquire an efficient database management system, because there is no manual procedure that can cover all the data of the companies in existence.”
