Kemi Adeosun, Nigeria’s minister of finance has ordered vendors of ministries, departments and agencies (MDAs) to display their Tax Identification Numbers (TINs) on their invoices before payments are made by the MDAs.
This directed was handed out yesterday to the Accountant General of the Federation as part of efforts to block revenue leakages by the MDAs vendors after about N100 billion has been discovered as tax revenue shortfall by contractors between 2012 and 2017.
“In order to address these lapses in the implementation of the 2017 Budget as well as boost the revenue accruable to the Government, all MDAs should be directed to insist that invoices submitted by vendors for payments must clearly state the TIN,” said Adeosun.
The minister further said, “This is to confirm tax compliance by relevant government vendors before payments are effected.
In a memo titled “Compliance with Tax Payments by Federal Government Vendors” disclosed that persistent leakages in revenue remittances by vendors had been uncovered by the Government’s Project Lighthouse, a systemwide revenue intelligence data-warehouse.
The leakages according to Adeosun were due to lack of TIN particularly on Value Added Tax (VAT), Withholding Tax (WHT) and other related inflows into the government coffers. She added that the directive to the government vendors is in compliance with the provision of both the Federal Inland Revenue Service and the Procurement Acts of 2007 respectively.
Revenue leakages have been a critical issue in the management of Nigeria’s fiscal system. A senate inquiry in October last year, discovered rampant under recoveries by Federal Government collection agencies stating that loophoeles in the system were routinely abused.
Hope Uzodinma, who headed the inquiry said that major sources of revenue losses in the import and export value chain were abuse of waivers and concessions and Import Duty Exemption Certificate (IDEC).
Other abuses, according to him, are the diplomatic cargo and personal effects privilege to clear consignments meant for commercial use, multiple issuance of Tax Identification Number (TIN) to importers by Federal Inland Revenue Service (FIRS), among others.
Uzodinma further said that the infractions within the system disproportionately distorted the economic profile of the economy and placed extensive pressures on the nation’s scarce foreign exchange, adding: “It also negates all CBN initiated foreign exchange management plans.”
Adeosun has said that to ensure that this carried out, the minister said that spot checks would be undertaken on MDAs to confirm compliance with the directive.
ISAAC ANYAOGU
