Hundreds of customers went home disappointed in Ado Ekiti, the Ekiti State capital, on Wednesday as the state government shut two banks over alleged non-remittance of withholding tax.
Officials of the Board of Internal Revenue (BIR) stormed Guaranty Trust Bank (GTB) and Ecobank, both located on Secretariat Road and closed them down.
The closure which caught the bank staff and customers unawares saw banking operations ending abruptly.
Apart from the doors to the banking halls, the gates of the two banks were firmly locked by the revenue officials.
The two banks earlier had issues with the state government over their refusal to give money to government contractors handling rehabilitation of the Secretariat Road where they are located as part of their Corporate Social Responsibility.
An official of BIR who craved anonymity said the two banks were asked to submit documents relating to deductions on withholding tax on interests payable to customers.
According the source the state government had secured court orders to shut the bank, adding that the action was within the ambit of the law.
He said: “The banks are supposed to pay the withholding tax to the state government but they refused to do so.
“We commissioned a consultant to investigate the money they make on the interest on the deduction withholding tax and we discovered that the amount is huge.
“The government took the banks to court and the court granted our prayers to seal them off to recover the money.
“The court graciously granted the Ekiti State government the power to seal the banks until they pay the tax. The order was given by the Chief Judge, Justice Ayodeji Daramola on 17th May.
“This has nothing to do with the issue of Corporate Social Responsibility , it has to do with the withholding tax.”
Commissioner for Information, Lanre Ogunsuyi, appealed to customers of the affected banks to show understanding, expressing hope that the matter will be resolved within the shortest possible time.
Ogunsuyi explained that the government’s action was backed by order of the court of law, as the government is duty bound to collect taxes in public interest.
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