May 13, 2019

The Federal Inland Revenue Service (FIRS), on 30 April 2019, notified the public that it has introduced new measures to simplify and ease tax audit experience for all taxpayers. The new measures are intended to: Reduce tax audit cycle to 63 days Eliminate multiple tax audits by various tax authorities Facilitate a single tax audit exercise window for a taxpayer that operates in more than one tax jurisdiction within Nigeria In order to ensure that the above objectives are achieved, FIRS, various States Internal Revenue Service (SIRS) and Joint Tax Board (JTB) signed a Memorandum of Understanding (MoU). Understandably, the achievement of the 63-day cycle for completion of a tax audit exercise will depend largely on human factors such as; ease of provision of relevant documents by taxpayers, level of efficiency of the tax authorities during the review process and availability of the parties for reconciliation meetings to resolve the tax audit issues identified. Thus, it may be challenging or difficult to conclude some tax audit exercises within the recommended timeline above. Nonetheless, the recommended timeline sets a benchmark that tax authorities and taxpayers can work towards to ensure the speedy conclusion of tax audits. To ensure the objectives of the new measures are achieved, tax authorities may also consider simplifying tax audit selection procedures and adopting a risk-based approach to tax audit exercises. Further, while there are no indications on the required steps to reduce the audit completion cycle, elimination of multiple tax audits would go a long way in reducing the time spent by taxpayers. With respect to elimination of multiple tax audits, the FIRS Notice requires a taxpayer that operates in more than one tax jurisdiction within Nigeria, to apply for a joint tax audit through JTB, or the Office of FIRS’ Executive Chairman, or the Office of the Chairman of the relevant SIRS where the taxpayer’s head office is domiciled. This initiative is a welcome development and a step in the right direction in addressing taxpayers’ clamour for elimination of multiple tax reviews and audits to ensure efficient use of resources of both the tax administrators and the taxpayers. It remains to be seen, how the MoU would play out. It would be recalled that FIRS signed MoU with SIRSs during the Voluntary Assets and Income Declaration Scheme (VAIDS). However, the aftermath of VAIDS was greeted by conflicting tax audits/reviews by SIRSs, which included years already covered under VAIDS, for which a taxpayer had already made a voluntary declaration. It is hoped that the MoU would be upheld to ensure that the above objectives are met.   Source: Deloitte

The Economic and Financial Crimes Commission (EFCC) has launched a probe into the activities of some staff of the Federal Inland Revenue Service (FIRS). Babatunde Fowler, FIRS chairman, confirmed the development to TheCable on Wednesday saying the probe borders on alleged cases of irregularities concerning duty tour allowance (DTA). “On the DTA (Duty Tour Allowance), it was claimed that some staff applied for and were granted, allowances to travel for official trips. Some are alleged not to have travelled for the number of days, for which they were slated. The EFCC is looking into that,” he said. “Sometimes, it is good to have a third party investigate matters like this instead of having a staff investigate another staff. An investigation by a third party is more objective. FIRS has since taken steps to remediate this. “The EFCC will soon complete its investigation. Anybody found guilty will be dealt with through our administrative process.” Fowler also dismissed claims that taxpayers’ money has gone missing. He explained that all taxes are paid directly into the account of federation account through the Central Bank of Nigeria. “The FIRS does not have access to taxpayers money. Its operations are funded by an appropriation of the national assembly through monthly remittances by the federation accounts allocation committee (FAAC),” he said. Fowler added that FIRS acknowledges the statutory rights and responsibilities of anti-corruption agencies and other government agencies such as the EFCC, the Independent Corrupt Practices and Other Related Offences Commission (ICPC), State Security Services, SSS to inquire into the operations of the Service. The FIRS chairman promised that FIRS would continue to give access to agencies with statutory rights adding that invitations of officials of the service by EFCC, the Police, SSS and ICPC to shed light financial transactions are not uncommon.   Source: The Cable

The Chairman of the Federal Inland Revenue Service (FIRS), Mr. Tunde Fowler, has dismissed reports suggesting that money paid as taxes is missing from the agency’s coffers. Fowler made the clarification in an interview in his office in Abuja, yesterday. The clarification came in the wake of media reports alleging that taxpayers’ money in the custody of the agency is missing. The FIRS chairman explained that taxes collected by the FIRS are not paid into the coffers of the agency, but directly into the Federation Account, electronically, through the Central Bank of Nigeria (CBN). The FIRS, he further explained, does not have access to taxpayers’ money, adding that its operations are funded by appropriation of the National Assembly through monthly remittances by the Federation Accounts Allocation Committee (FAAC). There were reports of alleged exploitation of the agency’s accounting system on Duty Tour Allowance (DTA) by some staff who collect claims that they are not due for. This alleged infraction is said to be under investigation by the Economic and Financial Crimes Commission (EFCC). However, some media outlets have reported that the probe was into missing taxpayers’ money. But Fowler explained that the issue at stake in this inquiry is related to operational/travel funds within the FIRS’ expenditure budget. “On the DTA (Duty Tour Allowance), it is claimed that some staff applied for and were granted allowances to travel on official trips. Some are alleged not to have travelled for the number of days for which they were slated. The EFCC is looking into that. Sometimes, it is good to have a third party investigate matters like this instead of having a staff investigate another staff. Investigation by a third party is more objective. FIRS has since taken steps to remediate this. The EFCC will soon complete its investigation. Anybody found guilty will be dealt with through our administrative process,” said the FIRS boss. Fowler also stated that the agency has a relationship with the EFCC through which it combats tax evasion. “We have a relationship with the Economic and Financial Crimes Commission (EFCC). We have a partnership through which we combat evasion of taxes. People don’t want to get into trouble with EFCC. So, they pay on time,” he explained. Fowler added that FIRS acknowledged the statutory rights and responsibilities of anti-corruption agencies and other government agencies such as the EFCC, the Independent Corrupt Practices and Other Related Offences Commission (ICPC), and the Department of State Services (DSS) to inquire into the operations of the agency. He promised that the FIRS will continue to give access to agencies with statutory rights and all those who seek information on its operations. He added that invitations of FIRS officials by the EFCC, Police, DSS and ICPC to shed light on financial transactions and operations of the agency are common and are continuous. Fowler noted that the FIRS is a public trust operated on behalf of Nigerians and affirmed that no officer of the Service is at large. The FIRS boss thanked all stakeholders, including the media, for their interest in the operations of the agency. However, he enjoined the media to always go the extra mile to ascertain the truth, particularly on sensitive financial issues where taxpayers and public trust are at stake. He re-assured the general public of FIRS’ commitment to public accountability and transparency in the sacred mandate of tax collection.   Source: This Days