July 9, 2019

The Lagos State Internal Revenue Service (LIRS) on 30 May 2019 issued a Notice informing the public of the new Tax Identification Number (TIN) which will be issued to every individual, registered business and incorporated companies. The issuance of the new TIN follows the deployment of a new tax administration system by the LIRS called the Lagos State Government Electronic Banking System (LASG-EBS) and the integration of the LASG-EBS Taxpayers Identification Digit (PID) with the Joint Tax Board (JTB) nationwide TIN. The new TIN which will provide individuals and companies access to the LASG-EBS will be biometric based and will also be linked to the Bank Verification Number (BVN) of the individuals or companies. Benefits The integration of the LASG-EBS PID with the JTB nationwide TIN and the subsequent issuance of a new TIN is expected to: Facilitate seamless sharing of taxpayer’s data with the JTB, State Internal Revenue Services and other stakeholders; Eliminate multiple payer IDs; Simplify registration of taxpayers; Encourage ease of doing business; and Reduce the cost of compliance borne by the taxpayer and the tax authorities etc. Requirements For Obtaining New TIN BVN validation is required for access to the LASG-EBS platform for all transactions including issuance of new TIN, payment of taxes, registration etc. All employers are therefore required to include the BVN of employees on their electronic tax clearance certificate (e-TCC) application forms before submission to the LIRS for processing. All self employed individuals are also required to provide their BVN to the LIRS. This would assist the LIRS in creation of the new TIN. Legal Basis For BVN Request Section 47 of the Personal Income Tax Act (PITA) 2011 gives the LIRS the authority to request for any information from any person for the purposes of obtaining full information in respect of his or her income or gain. The LIRS has assured taxpayers of the security of the BVNs in their custody in accordance with Section 48 of PITA 2011 which does not allow the LIRS to disclose such information except: In any legal proceeding arising from PITA; or To any tax authority ; or In accordance with any provision of an arrangement, with respect to taxes, made with any other country. Effective Date The LIRS is yet to announce the start date for the issuance of the new TIN as the merging of the LASG-EBS PID with the JTB’s TIN is still ongoing. However, taxpayers are required to start submitting BVNs immediately to the LIRS. Takeaway The move towards an integrated TIN is reflective of the government’s desire to ease doing business and also encourage federal and state authorities to collaborate more in order to ensure a more efficient and effective tax administration system in the country. The deployment of the LASG-EBS and the integrated TIN should provide a platform for proper and easy tax administration for the LIRS if properly implemented and will provide both the LIRS and taxpayers’ access to tax records and payments.   Source: Proshare

In line with its commitment to deepen the capacity and growth of businesses in Nigeria, particularly the Small and Medium Scale Enterprises (SMEs), First City Monument Bank (FCMB) will on June 26, 2019 host a seminar on tax matters in Lagos. The seminar, tagged, ‘’Tax Enforcement and Implications on Businesses in Nigeria’’, is aimed at equipping entrepreneurs with requisite knowledge on taxation by promoting the exchange of ideas between tax regulators and businesses on existing and emerging tax matters to ensure compliance and avoid sanctions. The one-day seminar would have in attendance SMEs operating in various sectors, including, trading, manufacturing, agribusiness, renewable energy, creative industry, digital technology, healthcare, schools and individuals running businesses in their personal names or accounts. The director of enforcement, Federal Inland Revenue Service (FIRS), Emeka Obiagwu would be the guest speaker at the event, the lender said. In a statement, FCMB said topical issues relating to the country’s tax system and laws as well as other fiscal policies that impact on the profitability and overall success of businesses would be discussed at the seminar by the guest speaker and other professionals. It would also provide an opportunity for entrepreneurs to understand their rights and responsibilities, especially as regards taxes, such as withholding tax and value added tax, among others. There will also be a session by FCMB Pensions Limited to enlighten participants on new pension initiatives in the country, the implications for SMEs and the attendant benefits. Responding to inquiries about the seminar, the Executive Director, Business Development of FCMB, Bukola Smith, reiterated that the commitment of the Bank is to go the extra mile in empowering businesses with relevant technical and financial know-how that would boost their performance and contribution to national development. ‘’As the dynamics of taxation continues to change in Nigeria, we recognise that many businesses, especially SMEs, in the country are not equipped with the requisite information and knowledge to discharge their responsibilities in this area appropriately. It is based on this reality that we decided to organise a seminar on tax matters, which will go a long way towards helping SMEs to understand taxation and the processes involved better’’. Smith added: ‘’As an inclusive lender that places a lot of importance on best practices, FCMB considers it imperative to ensure that our customers in the SME space conduct their businesses in a responsible, transparent manner and under full compliance within all applicable laws, rules, regulations and policies’’. First City Monument Bank (FCMB) Limited is a member of FCMB Group Plc, which is one of the leading financial services institutions in Nigeria with subsidiaries that are market leaders in their respective segments. Having successfully transformed to a retail banking and wealth management led group, FCMB expects to continue to distinguish itself through innovation and the delivery of exceptional services.   Source: Punch

The Revenue Mobilisation Allocation and Fiscal Commission (RMAFC) has stated that it has so far recovered the sum of N57.7 billion from Deposit Money Banks (DMBs) in its ongoing monitoring and verification exercise on tax collections by the financial institutions. The banks had been contracted by both the Federal Inland Revenue Service (FIRS) and the Nigeria Customs Service (NCS) to collect revenues on their behalf. This is as the commission further has insisted that its current verification exercise on tax collections by banks was within its mandate as contained in Section 6(1) of the RMAFC Act, 2004. This section, according to the agency, provides that the commission shall have powers to among others, monitor the accruals to and disbursement of revenue from the Federation Account. The commission had come under criticism from a section of the public over the legality of the exercise. Nevertheless, the commission, in a statement issued by its Head, Public Relations, Ibrahim Mohammed, further explained that the sum of N48.7 billion had already been recovered and remitted into the Federation Account, while the balance of N9.07 billion, which related to withholding tax on dividend had been duly released to the benefitting states Boards of Internal Revenue (SBIR). In its previous exercise covering January 2008 to June 2012, RMAFC had announced the recovery of the sum of N4.2 billion from the banks, and had promised more recoveries. Following the subsequent approval by the National Economic Council (NEC), which launched the second phase of the exercise covering the period July 2012 to December 2015, the sum of N57.7 billion was reportedly recovered from the exercise. According to the statement, “It is worth clarifying that RMAFC does not deal with individual tax payers directly but monitors collections by collaborating with sister agencies like the Central Bank of Nigeria (CBN), Nigerian National Petroleum Corporation (NNPC), Department of Petroleum Resources (DPR), Nigeria Customs, and FIRS to ascertain how much was actually collected and remitted into the Federation Account so as to minimise revenue leakages. “It was not a tax authority but a revenue watchdog that monitors revenue collections by revenue generating entities like the FIRS, Customs, DPR, NNPC and others that remit directly into the Federation Account. The revenue streams that accrue into the federation account under the watch of RMAFC include tax (Withholding Tax and Vat), Royalties, Signature Bonuses, custom duties, tariff.” “In order to ensure transparency and accountability in revenue generation and remittance with a view to reducing revenue leakages, the commission seeks further collaboration and cooperation of revenue generating and regulatory agencies, anti-corruption agencies as well as the civil society and the media,” the agency explained.   Source: This days

The Nigeria Employers Consultative Association (NECA) has called on state governments to engage in an aggressive taxpayer enlightenment as well as expansion of their tax net to increase their Internally Generated Revenue (IGR). The call was made following President Muhammadu Buhari’s advice to State Governments to increase Value Added Tax (VAT) in an attempt to increase their IGR. NECA said that increasing VAT this time to increase IGR is not only misplaced but will further impoverished citizens that he promised to take out of poverty as well as do more harm to the already burdened private sector. Director-General, NECA, Timothy Olawale, who stated that the President meant well by urging state governments to be innovative in increasing their IGR, and at the same time prudent in their expenditures, also argued that state governments cannot unilaterally increase VAT without the amendment of the VAT Act at the National Assembly. According to him, it is the common man that will definitely be at the receiving end of any increase in VAT. Even if businesses are taxed more through likely illegal levies and rates outside the provisions of the law, they will naturally pass the cost to the customers whose purchasing power is already at the lowest ebb. Proposing a way out, Olawale said both the federal and state government must engage in an aggressive taxpayer enlightenment and expansion of the tax net to capture more citizens, stating that less than 40% of Nigerians are tax compliant.He suggested that the States should put mechanisms in place to eliminate leakages as a large chunk of the IGR realised does not find their way into government coffers. Olawale advised governors on reduction on cost of governance, while several unnecessary retinues of aides kept by them at prohibitive cost to the State are needless. “Besides, ingenious idea of corrupt practices in the name of security votes and frivolous foreign travels by State government functionaries are veritable examples of cuttings in avoidable expenses draining state government purses.”   Source: Guardians