- Insist on correct collections, prompt remittances
BY COBHAM NSA, ABUJA – The Federal Inland Revenue Service (FIRS) says the days of lost revenue from non-payment of Stamp Duty, Withholding Tax and Company Income Tax (CIT) by government contractors are over for good
Accordingly, the Service has given marching orders to Revenue collecting agencies to deduct all relevant taxes and levies from their contractors at the point of payment and promptly pay lump sums into government coffers.
In a statement demonstrating its resolve to rein in all errant tax payers, the FIRS Chairman, Muhammed Nami said in Lagos that; “Revenue collecting agencies are to deduct stamp duty, withholding tax and CIT from their contractors at the point of payment and promptly send these to the Federal Inland Revenue Service (FIRS) in lump sum, rather than staggered payments as it is the current practice.”
Nami said the new arrangement will ensure there is no hiding place erring contractors, adding; “This is better for everybody as we would all have to do less reconciliation and enforcement activities, and we can therefore use the saved time to expand the tax net.”
Speaking during his visit to Lagos State Governor, Babajide Sanwo-Olu at the State House, Alausa in Ikeja, the FIRS Boss noted that some multinational companies operating in Lagos have not been paying CIT since 2011.
Promising to track down and put in the net all tax-evading companies, he said: “A number of multinational companies operating in Lagos State have not paid CIT since 2011 as they appeared to have perfected the illicit act of profit shifting to escape paying tax.
“The FIRS and the Lagos State government need to collaborate to map out strategies to tax these tax-evading companies, whose goods and services we all consume or patronise and who also use public infrastructure to do their business but yet repatriate their profits home.”
According to him, “We need to tax them so that we can have the fund to combat insecurity, build and maintain public infrastructure and provide social amenities for Nigerians.”
Also hinting that all tax-collecting agents in the public and private sectors are under intense scrutiny. the FIRS Chairman tasked them on making a priority of correct collections and prompt remittances of all collectable taxes.
On outstanding Value Added Tax (VAT) in relations to contracts invoiced before the February 1, 2020 kick-off date for Finance Act 2019, Nami said such commitments should be based on the old VAT rate of five per cent and warned of consequences for defaulting collecting agencies that fail to update books appropriately.
Also unveiling to Governor Sanwo-Olu existing palliatives for taxpayers in the new Finance Act, Nami said these include reduction in CIT for Small and Micro Enterprises (SMEs) from 30 per cent to 20 per cent; VAT exemption for SMEs who make a turnover of less than N25 million and a further cut by two per cent for corporate and individual taxpayers who file their CIT or Personal Income Tax (PIT) returns three months before due date.
Furthermore, on the table for discussion was the need for a robust partnership between the Service and Lagos State government, especially in areas of information sharing; correct collection and prompt remittance of CIT, PIT, Withholding Tax and Stamp Duty as well as tax audit.
In his remarks, Governor Sanwo-Olu said the local economy has capacity to generate more than the N8.5 trillion the FIRS has been mandated to collect.
“When we look at our economic indices, and we need this money, it is only when the FIRS do well that we can get this money through the FAAC. We in Lagos pledge to work even closer with you in the FIRS to meet your target”, he assured the visiting FIRS team
The governor, who spoke on transparency in the utilization of public funds, said; “We also pledge to use the money judiciously in the service of the public when it comes back to us as allocation.”
The FIRS Chairman also visited National Airspace Management Agency (NAMA) where he was received by Director, Safety, Electronics and Engineering Services (DEES), Engr. Farouk Ahmed,
Mr. Nami stressed the need for collecting agencies to support the FIRS by re-dedicating themselves to correct assessment, collection and prompt remittances of all taxes accruable to the Federal Government.
He also called for increased diligence on the part of NAMA and other collecting agencies in the sector to ensure effective and efficient collection of offshore taxation from service providers based outside Nigeria.
