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12 September 2018 Nigeria's FIRS provides updates on tax administration in Nigeria The Executive Chairman of Nigeria's Federal Inland Revenue Service (FIRS), Mr. Babatunde Fowler delivered, on 6 September 2018, a keynote address at a stakeholders' meeting on "Tax Administration and National Revenue." The stakeholders' meeting was aimed at charting the way forward for the country's tax administration and offering solutions to the challenges hindering a robust tax regime. Representatives from Ministries, Departments and Agencies (MDAs), labor unions, tax consultants, the Manufacturers Association of Nigeria (MAN), the Institute of Chartered Accountants of Nigeria (ICAN), and other private sector organizations, among others, attended the forum. Increased focus on Value Added Tax (VAT) collection: The Executive Chairman reiterated that Nigeria still remains one of the countries with the lowest tax to Gross Domestic Product ratio, despite the fact that the FIRS' collection from January to August 2018 stands at NGN3.5trillion which is NGN1trillion above the total collection for the prior year. To address the gaps in the tax compliance culture, he stated that the FIRS will increase its focus on the collection of non-oil revenue, with specific emphasis on VAT. He further revealed that several businesses are collecting VAT and not remitting to the Government. In addition, he said that VAT certificates for compliant companies will be issued by the FIRS and taxpayers will be expected to display this at their offices at all times. Tax refunds: The Executive Chairman addressed the inefficiencies with respect to the grant of tax refunds. He stressed that the Federal Government sets aside a substantial amount of money every month for taxpayers with established refund cases. He advised that henceforth, taxpayers who have established cases of excess taxes paid to the various tax authorities should come forward and apply for the refund. Amendment to tax laws: The Executive Chairman acknowledged the fact that most of Nigeria's tax laws are outdated and do not conform to current realities. He stated that the Government has indicated its willingness for annual tax amendments to be incorporated in the country's budget report each fiscal year. Banks as collection agents: In response to the recent outcry by taxpayers/consultants on the appointment of Banks as collection agents to recover unpaid taxes and the subsequent reported cases of the Banks (on behalf of FIRS) freezing the accounts of the defaulting taxpayers, the Executive Chairman clarified that the exercise was directed at companies with a Tax Identification Number (TIN) that had not remitted any taxes, and companies who did not have a TIN and therefore had not been remitting taxes. He stated that the exercise was necessary considering that these groups have refused to take advantage of the tax amnesty program carried out in 2016 and the just concluded Voluntary Asset and Income Declaration Scheme. Consolidated database for all taxpayers: The proposed consolidated database for all taxpayers with the Joint Tax Board will be made available to all tax authorities and other government agencies such as Immigration and Customs in Nigeria before the end of September 2018. The database is expected to harmonize tax collection across the various states in Nigeria and also enhance the conduct of a joint audit on a single company with presence across several states. Reconciliation of the withholding tax (WHT) credit: The FIRS recently sent a circular to taxpayers, inviting them to reconcile their WHT position for the purpose of uploading on the Automated Tax Credit System within 15 days of receipt. Based on the circular, companies that are unable to complete the reconciliation by the set date will forfeit the right to present any such previous WHT credit notes for tax offset in the future. The Executive Chairman assured taxpayers at the forum that the taxpayers will not lose their unutilized WHT credits in the event they were unable to complete the reconciliation process within the short period allowed. He encouraged taxpayers to commence the reconciliation process as quickly as possible for ease of administration. In addition, he stated that due to the introduction of Information and Communication Technology (ICT) in the tax compliance process, taxpayers who had suffered deductions to taxes by government agencies will receive their credit within 45 days. Any deviation from this should be reported to the FIRS. Guidelines on deregistration of a company: Companies with the intention of deregistering and ceasing business in Nigeria experience difficulties in closing out the process because there are no clear guidelines issued by the FIRS to guide the liquidation process through de-registration. The Executive Chairman indicated that these issues will be looked into by the FIRS and such difficulties addressed. Introduction of an Efficiency Helpdesk: The Executive Chairman explained that the FIRS and its state counterparts are committed towards improving efficiency. He noted that this is especially with regard to the issuance of Tax Clearance Certificate (TCC). He further advised that in the event of any delay or failure to issue TCCs, taxpayers are free to communicate their grievances through the "Efficiency Desk" of the FIRS. The Efficiency Desk can be reached via email at efficiency@firs.gov.ng or via phone on +234 907 032 6705.
Document ID: 2018-6070 |
