FIRS Partners MDAs, Police On Tax Leakages
BY COBHAM NSA, ABUJA – The Federal Inland Revenue Service (FIRS) has stepped up collaborative efforts with Ministries, Departments and Agencies (MDAs) to block loopholes exploited by some of them to pay inappropriate taxes and deprive government of its revenue earnings.
The move is also aimed at increasing the rate of compliance with the Pay-As-You-Earn (PAYE) tax remittances under the Progressive Tax System (PTS) being operated in the country.
Chairman of FIRS, Mr Muhammad Nami, dropped this hints on Thursday during a courtesy call on the Inspector-General of Police (IGP), Mr. Mohammed Adamu, at Force Headquarters, Louis Edet House, Abuja.
Nami said it is regrettable that remnants of MDAs’ workers yet to migrate to the Integrated Payroll and Personnel Information (IPPIS) platform are currently exploiting the inadequacies of the old salary system to evade and dodge tax payment.
According to him, the Service is therefore moving fast with measures that will effectively address the discomforting situation that has adversely affected government revenue profile.
Mr Nami’s explanation followed a query raised by the Police authorities during the visit that their personnel, who earn comparable salary with their sister security agencies, were paying higher tax than obtainable in some MDAs.
He said: “Nigeria operates the progressive tax system under which the more you earn, the higher you pay. However, the progressive tax system also provides a better tax relief package on your dependent relatives compared to the former system through the provision of consolidated tax relief.
“If you earn below N300,000 per annum for instance, you virtually don’t pay any tax. And even if you earn well above that threshold, the consolidated tax relief system gives you N200,000 per person in the first instance. If your earning after this first tax threshold is still above N300,000, the consolidated tax relief system still gives you 20 per cent as tax rebate on the total taxable sum of your earnings. This was not the case under the old system where you only got N2,500 tax relief per child.”
The FIRS Chairman lauded the Police authorities for making their correct remittances on Pay As You Earn (PAYE) tax deducted from their personnel’s salaries, just as he also commended them for supporting FIRS, especially in enforcing tax compliance nationwide.
The FIRS chairman however pleaded with the Police to fully apply same approach in deducting Withholding Tax (WHT); Value Added Tax (VAT); and the one (1) per cent Stamp Duty on contractual transactions they have with their contractors and service providers as well as procurement-related activities as statutorily demanded by the 2019 Finance Act.
Nami said the measure help the FIRS to achieve its N8.5 trillion tax revenue target for 2020 fiscal year.
The FIRS boss pledged to continuously engage the Police and other tax payers as well as collecting agents in clearing up all grey areas in the nation’s tax sector.
Speaking at the occasion, IGP Adamu applauded FIRS for its diligence in collecting taxes to boost government revenue that is deployed to pay “our salaries and build public infrastructure,”
He said; “Nigerians should willingly pay their taxes in enlightened self-interest.”
A statement by Abdullahi Ismaila Ahmad
FIRS Director of Communications and Liaison Department, quoted the Police chief as saying that; “Every Nigerian should be happy to pay tax in order to help everybody.
“I urge the FIRS to put up a tax system that will ensure that nobody in the country is able to evade tax. The Police are open to provide any support you need in this regard.”
