In a dramatic escalation of tensions, the Cross River State Internal Revenue Service (IRS) has issued a stark warning to the University of Calabar (UNICAL), threatening legal action if the institution continues to flout state tax laws. For years, UNICAL has maintained that, as a federal institution, it is exempt from state taxation, a stance that has fueled an ongoing conflict with the state government.
This alarming announcement was made by Mr. Ayi Okon, Director of Compliance at the Cross River IRS, during a recent event where non-compliance stickers were visibly affixed at various locations on the university's campus. Okon led a team of IRS officials to UNICAL, revealing that a back-duty audit conducted on the university from 2018 to 2022 uncovered a staggering N3.7 billion in unpaid taxes. This hefty sum, communicated to the institution through an assessment notice, has become a flashpoint in the dispute.
Despite multiple attempts to engage with UNICAL, the university has largely remained unresponsive. "We issued a demand notice in April 2024, which went unanswered. After a final notice in May, we were compelled to send a pre-action notice before they finally replied in writing," Okon explained.
After their initial response, UNICAL participated in a series of reconciliation meetings, during which commitments were made to address the outstanding tax obligations. However, Okon stated that these commitments have yet to be fulfilled, raising concerns about the university's willingness to cooperate.
"Withholding tax revenue due to the government is tantamount to undermining the development projects of our state," Okon emphasized, making it clear that the IRS views the matter with utmost seriousness. He warned that if the university administration fails to respond within the next seven to 14 days, the IRS legal team will initiate further legal proceedings.
Echoing this sentiment, Mr. Emmanuel Esira, Director of Legal Services and Enforcement for the Cross River IRS, affirmed that all necessary legal protocols have been followed. The placement of non-compliance stickers is part of their strategy to compel UNICAL to meet its tax responsibilities and avert impending legal consequences.
The growing rift between the state revenue authority and the university has sparked concerns among students and faculty alike. Many fear that continued non-compliance could lead to repercussions that affect funding for educational programs and resources.
