We are a 200+ people strong workforce working as direct contractors for a blue chip oil company in Rivers State since year 2000.
Our employers shocked us this morning by confirming what we hitherto suspect. That they were wrong to be taxing our allowances. For 16 years they have been taxing both our salary and allowances in a frivolous scheme they call PAYE(pay as you earn) without any tax receipt or clearance from any tax collecting agency whatsoever.
Today they told us that henceforth our allowances will not be taxed and that the management has magnanimously decided to refund tax monies charged on our allowances from May 2015 to date. We now asked what happens to the one they have been collecting for 16 years. And the reply we got was "that one is past".
Please I need clarification from tax experts/legal practitioners on:
1. Is it right to tax both our salary and allowances?
2. Does it not amount to fraud against the state to collect taxes from workers and keep same?
3. Is it right for the company to deny us our accrued illegally collected tax money which runs into hundreds of thousands( if not million) per head?
4. What lawful action can we take to recover these illegal deductions?
We believe their action is out of fear of Buhariyya.
Cc: CrazyMan, 1forall pls help

1. No, only ur salary is taxable as per current laws
2. Yes it is.
3. No, definitely wrong
4. Class action. you all should come together as a unit n face ur mgt...where ur mgt still refuses wise counsel, u get a lawyer n sue them. however note that doing this would definitely cost u ur job in one of 2 ways...a. the company goes down due to the amount they need to refund or b. the company ask you n those that spearheaded such to leave after they have refunded u.

Report the case to the FIRS. They will take care of the rest. Over 70% of businesses in Nigeria are involved in this illegal act.

As for refunds of the illegal deductions,you might not get it back as the employees will be listed as accessories. Moreover,by the time your coy pays the appropriate monetary fines,your mind will be focused on retaining your jobs rather than reclaiming the illegal deductions.

In 2016,FIRS will go hard on these tax evading companies.

ruffp:
1. No, only ur salary is taxable as per current laws
2. Yes it is.
3. No, definitely wrong
4. Class action. you all should come together as a unit n face ur mgt...where ur mgt still refuses wise counsel, u get a lawyer n sue them. however note that doing this would definitely cost u ur job in one of 2 ways...a. the company goes down due to the amount they need to refund or b. the company ask you n those that spearheaded such to leave after they have refunded u.

i concur with his reply. Think twice b4 taking any step against the mgt.

Your company have been hint that FIRS is visiting them very soon and when they come, they will caculate in arrears for the staff to begin payment installmentally. This will be deducted from your salary in a large sum every month until u finish paying the arrears. And some of you will want to challenge the staff of FIRS because the same tax has been deducted from your salary in the past thereby exposing the company. This will make the company to be sanction for deducting your salary without remitting it to FIRS. Now they are trying to aviod that santion so they want to refund the amount deducted from may till date so as to make it look like they have never deducted tax from your salary. Mind u whether u accept or not, FIRS will come and they will calculate in arrears for or staff. For your own good, you have to let them be so as not to loose your job. If u blow the whistle, the FIRS staff that is suppose to sanction them will be bribe and your company will sack you.

Thanks men. Your responses are most helpful.