Hard times await majority of Nigerian states who failed to remit various taxes collected on behalf of Federal Inland Revenue Services (FIRS) over the past five years, as Federal Government weighs option of enforcing the deduction from their monthly federal allocations.
According to Babatunde Fowler, FIRS chairman, less than 20 percent of the taxes (Value Added Tax, Withholding Tax and CIT) collected by the affected states were accounted for, adding that “a lot of states never remitted taxes” yet benefitted from the monthly federal allocations.
Fowler said the Joint Tax Board meeting held recently in Kano State resolved to bring the taxpayers at the state level from 10 million to 20 million into the tax net by May 2016.
The FIRS chairman also said 363,000 taxpayers had so far been captured into the tax net since resumption, adding that as from May 2, 2016, all federal ministries, departments and agencies (MDAs) were to begin to remit appropriate taxes including VAT and WHT deducted from payment to contractors into the Consolidated Revenue Fund (CRF).
Fowler, who spoke at the ongoing investigative public hearing on ‘FIRS accounting procedure,’ held at the instance of Adhoc Committee chaired by Michael Enyong Okon, unveiled plans to shore up the country’s revenue by raising the tax base of companies operating in the country from N10 million to N20 million by the end of 2016 fiscal year.
So far, N700 billion VAT has been realised by FIRS out of the N2 trillion for this year, while over 100,000 companies operating across the country have never paid taxes, Fowler alleged.
At the public hearing, the FIRS chairman submitted lists of highly indebted companies from various sectors of the economy including: airline, telecommunication, and construction to the Adhoc Committee for further legislative action.
In the bid to recover the multi-billion unpaid taxes, Fowler said negotiation had been initiated with major debtors in the aviation, finance, telecom, oil and gas, suppliers of fertilizers and multinationals to ensure prompt payment of outstanding taxes.
In the bid to effective address the challenges, he disclosed plans to recruit 1,250 staff including about 1,000 auditors that would be required to audit compliance and enforce the tax policy.
He emphasised that all steps had been taken through the deployment of technology to ensure increased revenue as well as increase awareness through the media.
Okon and other members of the Adhoc Committee who summoned the Accountant General of the Federation (AGF) to appear before it on Wednesday (today) and Kemi Adeosun, minister of finance to appear next week to explain the rationale behind the flagrant disregard for the enforcement of Section 19 of the FIRS Act, which the lawmakers alleged abet and aid corruption and tax evasion.
Okon also directed the FIRS chairman to submit Federal Executive Council (FEC) approval for waivers and National Assembly’s approval for the 4 percent collection cost for FIRS and list of beneficiaries of the waivers.
The lawmakers also urged the FIRS chairman to push for amendment of relevant sections of the FIRS Act and other measures that would aid its effectiveness.
