February 25, 2019 – Sunmola David & CO

Experts Task FIRS On Robust Communication With Taxpayers

Financial experts have urged the Federal Inland Revenue Service (FIRS) to evolve effective communication and engagement mechanism with taxpayers to sustain economic growth. Speaking in Lagos recently, director-general of the Lagos Chamber of Commerce and Industry (LCCI), Mr Muda Yusuf said that imposing a tax lien should be a last resort of FIRS to force businesses to pay taxes, adding that tax administration should be consistent with the principles of equity, fairness, legality, accountability and due process. Yusuf was reacting to FIRS’s directive to banks to lift lien on tax defaulters’ bank accounts for 30 days. A tax lien is a legal claim by a government entity against a tax defaulter’s assets. Some corporate bodies complained of freezing and debiting of their bank accounts by FIRS through appointed banks on grounds of tax default. The FIRS, on Feb.15, wrote to banks’ managing directors to unfreeze bank accounts of the affected tax defaulters. It said the directive was issued because of the large number of taxpayers that besieged its offices in their bids to regularise their tax positions, and the inconveniences they were going through. He said: “Taxpayers should be given ample opportunity to defend their positions on tax matters before a lien is placed on their bank accounts. Some companies’ accounts are frozen in error because there is no proper engagement, documentation or communication with the taxpayers,” he said. Also, Mr Taiwo Oyedele, Tax Leader, PricewaterhouseCoopers (PwC), West Africa, said the substitution power granted FIRS under the relevant laws did not support freezing of bank accounts in the manner done by the service. “For most of the companies affected, FIRS did not send an assessment to them; they only got to know about it when they got to the banks and discovered that their accounts had been frozen. “The power granted to tax authority under the various laws is to be exercised strictly under specific conditions; it does not confer the right on FIRS or any tax authority to forcefully collect taxes that are under dispute or arbitrary tax assessments. “An assessment is undisputed where it results from a self-assessment by the taxpayer or where the taxpayer has specifically agreed to the assessment,” he said. Oyedele said that the power conferred on FIRS must be exercised with caution and in accordance with the law to avoid negative impact on the business environment and ease of paying taxes. Source: Leadership

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CITN promotes tax culture among women

Tax news, TAX SERVICES / Tobi Aminu

The President and Chairman of Council, Chartered Institute of Taxation of Nigeria, Chief Cyril Ede, has said that part of the functions of the institute is to educate people on taxation. Ede said this during a tax forum for corporate and professional women with the theme, ‘Building a new Nigerian tax culture through women’ organised by the Society for Women in Taxation, an arm of the CITN in Lagos recently. He stated, “Taxation is a price we pay for a civilised society and we cannot go away from it, that is why CITN is devoting time to make sure that we encourage everybody to make the knowledge known so that it does not become a crime. We have been doing that to our children in schools as tax clubs. We are trying to catch them young.” The CITN president said the government should allow tax education to be part of knowledge in schools so that they could grow with the understanding of taxation. The first female President of CITN, Mrs Adebimpe Balogun, explained that what professional women were doing today could be compared with the case of Aba women riot. She stated, “In those days, our women were not enlightened enough to understand the role of taxation and they were so unfairly treated, because in those days, a woman could not do a number of things but to take care of her home, that was why the women fought against taxation those days.” Source: Punch

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FIRS grants 30-day reprieve to wealthy Nigerian tax defaulters

TAX SERVICES / Tobi Aminu

The Federal Inland Revenue Service (FIRS) says defaulting wealthy Nigerian taxpayers who have no Taxpayer Identification Numbers (TIN) have only a 30 days lien to do so. The agency also said other Nigerians and firms with a turnover of N100 million in their accounts, but not paying taxes have only a 30 days lien to do so. The Executive Chairman of FIRS, Tunde Fowler, announced the period of grace in Lagos during a meeting with Manufacturers Association of Nigeria (MAN) on Friday. Mr Fowler said about 59,000 companies charging for the Value Added Tax (VAT), and sometimes Withholding Tax (WHT), for their services, do not have TINs for the remittances to the FIRS of the VAT or WHT taxes they charge. He said the banks will return the lien on tax defaulters’ bank accounts after the 30 days grace period. The lien was lifted last Friday, February 15, 2019. To ensure tax justice, protect all taxpayers and also ensure that monies deducted from taxpayers in form of VAT or WHT by business owners are properly accounted for and paid into the right treasury, Mr Fowler said FIRS resolved to restrict the bank accounts of defaulters’. He said last year, the FIRS, after reviewing the records from banks in the country, identified some operators who make a turn-over of between N100 million and N1 billion, but do not have TINs. However, in the course of their businesses, he said these operators charge VAT and perhaps WHT without remitting same to the FIRS. “If these companies do not have TIN, it means that they have not been paying their taxes. At the same time, they have not been remitting the VAT and WHT they charge on taxpayers to appropriate authorities, in this case, FIRS.” Criticizing the practice where companies would deduct monies meant for the government and fail to remit them to the appropriate agencies, Mr Fowler said if these people do not come forward to get TIN and pay appropriate taxes, FIRS will get their bank accounts frozen. “Tax payment is not only for civil servants or salary income earners alone. Millionaires and billionaires, who make incomes from this economy need to pay taxes. It is not fair for any business or any person who makes an income from this economy not to pay taxes. “Each of us must contribute to the national till. If any taxpayer has the opportunity to make their wealth in this economy, the least they can do is to pay their tax.” The Executive Chairman also explained that following turn-up of taxpayers to clear their arrears, the FIRS wrote to the banks to lift the lien on bank accounts temporarily for a period of 30 days. “In the last two weeks, the FIRS office was always besieged by taxpayers who want to clear their arrears,” he said. The Chairman said the situation came to a point where the FIRS had to send letters to banks to lift the lien for 30 days to enable taxpayers to regularise their accounts. To remove delays in receiving notifications after transactions on taxpayers’ accounts, the FIRS chairman said online solutions have been put in place to help taxpayers. He urged taxpayers to register their companies with their e-mails and telephone numbers, adding that once payments are made, notifications would be received instantly. He identified some of the initiatives the FIRS is adopting to improve VAT compliance to include Auto VAT collect, e-Services, VAT certificates, Central VAT filing, VAT coordination, Tax Audit and Investigation, Joint Tax Force, Taxpayer Education and SAG Platform (State Accountant General Platform). FIRS would honour proof of WHT deduction by any government agency. The President of MAN, Masur Ahmed, thanked the FIRS for conceding to their demands for a review of VAT charges on animal feeds. He said it was important for Nigeria to take a cue from other countries who have zero per cent VAT rate on animal feeds. The federal government, he said, should sign an Executive Order and Gazette that animal feeds should be VAT exempt in Nigeria. “This will go a long way to stabilizing the economy because VAT charges on animal feeds have adverse multiplier effects on the cost of production,” Mr Ahmed said. Source: Dubawa

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