June 14, 2019

The Lagos State Internal Revenue Service (LIRS) issued a Public Notice on 4 June 2019 informing taxpayers of its intention to integrate the existing Taxpayers Identification Digit (PID) into the nationwide Tax Identification Number (TIN) system with the Joint Tax Board. The LIRS intends to leverage the existing Bank Verification Number (BVN) operations to achieve this objective. Consequently, access to LIRS electronic platform for all transactions, such as registration and creation of Payer ID for new taxpayers, payment of taxes and validation of taxpayers’ profile will compulsorily require BVN validation. The Public Notice further requires every self-employed individual to provide their BVN to the LIRS for creation of their unique PID, while corporate organisations are to ensure that their employees provide their BVNs for processing of their tax clearance certificates (TCCs). Matters arising  The BVN is a very sensitive confidential information which is personal to individual bank customers. The operation of BVN in Nigeria is regulated by the Central Bank of Nigeria (CBN) through the Regulatory Framework for Bank Verification Number Operations and Watch-list for the Nigerian Financial System (“the Framework”). The CBN recognizes the importance of protecting bank customers’ data and has made access to BVN information by any party subject to a valid court order and its approval. This implies that access to BVN information is restricted and will only be conditionally released on case-by-case basis. While the Personal Income Tax (PIT) Act (as amended) empowers relevant tax authorities to request taxpayers to provide books, documents and information for the purpose of establishing their income or gain earned, the power must be carefully exercised especially where sensitive personal information, such as BVN is involved. This is necessary to avoid security risks to taxpayers. Hence, such power should not be interpreted to grant unfettered access to sensitive taxpayer’s data, such as BVN, except in the event of criminal investigation. While the data integration exercise by the LIRS may be desirable, the question is whether a BVN is necessarily required for the exercise. There is no question that a TIN can be issued without BVN and if personal identification is required at all for TIN to be issued, there are other less invasive means of identification, such as national identity card, driver licence, international passport, etc., that can be used for this purpose. The LIRS should be happy to see new taxpayers register for tax purpose upon presenting any valid identity card rather than introducing another layer of requirement for this purpose. The less the hurdles taxpayers have to cross the better. It is instructive that the Federal Inland Revenue Service has successfully registered several companies for tax purpose and issued TIN to them without requiring the BVNs of their directors. The LIRS should take a cue from this. The LIRS’ requirement for provision of BVN before taxpayers can be issued TCCs, when a TCC is only a confirmation of tax paid by a taxpayer is very concerning, especially after a taxpayer has discharged his civic duty. There is no reason to put another constraint on taxpayers when they should be given the freedom to print the document online as and when required. In the final analysis, as taxpayers may not have a choice but oblige the LIRS, it is important for the LIRS to put foolproof measures in place to ensure data privacy and protection of taxpayers.   Source: Pro share 

The Tax Club, University of Lagos clinched the first (1st) prize at the 2019 National Tax Quiz Competition held at the recently concluded Annual Tax Conference organized by the Chartered Institute of Taxation of Nigeria in Kado, Abuja. The Competition was an integral part of the Conference which was held between April 23 and 26, 2019, About 200 undergraduates from across Nigeria participated in the Competition. Out of these, six finalists were selected through a Four Stage Computer Based Test on different areas of Taxation. The Conference came to a crescendo with Orimijupa Olukunle David of the Faculty of Law, University of Lagos emerging winner of the Quiz Competition. The Vice Chancellor, Professor Oluwatoyin T. Ogundipe, FAS, on behalf of Management, Senate, staff, students and other members of the University community congratulates Orimijupa Olukunle David and members of the Tax Club, University of Lagos on this feat.   Source: Unilag

Top G20 finance officials agreed Saturday there was an urgent need to find a global system to tax internet giants such as Google, Facebook, Amazon and Apple, but clashed on the best way to do it. The G20 has tasked the Organisation for Economic Cooperation and Development to fix an international tax system that has seen some internet heavyweights take advantage of low-tax jurisdictions in places like Ireland and pay next to nothing in other countries where they make huge profits. OECD chief Angel Gurria presented G20 finance ministers and central bank chiefs meeting over the weekend in the western Japanese city of Fukuoka with a “roadmap”, already signed off by 129 countries, in a bid to clinch a long-term solution by 2020. “We have to hurry up,” stressed French Finance Minister Bruno Le Maire during a panel discussion of top policymakers before the G20 meeting officially opened. Le Maire called for a more ambitious timeframe to forge a global consensus, saying: “The right schedule is to find a compromise by the end of this year.” British finance minister Philip Hammond said taxing internet giants fairly was a response to something that is “perceived by our population to be a gross injustice in our tax system.” Ministers are weighing a new tax policy based on the amount of business a company does in a country, not where it is headquartered. But there are rival proposals in the mix, including a wider US-led approach that could affect European and Asian multinationals in other sectors than technology. US Treasury Secretary Steven Mnuchin took a blunt view of policies in Britain and France, which have already introduced their own taxes on digital players, given a lack of global consensus. “I would say the US has significant concerns with the two current taxes that are being proposed by France and the UK but let me give them some good credit for proposing them in the sense (that) they have created an urgency to deal with this issue,” said Mnuchin. “Although I don’t like them, I do appreciate the impetus for these issues,” added the top US finance official.   Source: PM News Nigeria