August 16, 2019

Individuals and business owners who make profits from businesses, but refuse to pay taxes, are criminals and economic saboteurs, the Chairman of the Federal Inland Revenue Service (FIRS), Tunde Fowler, has said. The FIRS Chairman was reacting to insinuations that the FIRS’ decision to place a lien on peoples’ accounts for refusing to take advantage of the amnesty window provided by the Voluntary Assets and Income Assessment Scheme (VAIDS) was highhanded. Mr Fowler disagreed with those holding the view, saying the FIRS did not apply the full provision of the law on the issue. What the law provides “What the law actually says is that the agency should put a lien on the account and based on the amount the FIRS has specified, it should be credited straight to the government’s account at the Central Bank Nigeria.  “The FIRS did not even follow that all through. It just said: put a lien and leave the money in their accounts. When they come and show us their records, we now know how much they are owing. “If they want to pay in installments, they will draw up an installment payment account. So, it’s not being highhanded at all,” he said. According to him, since the lien was placed of defaulters’ accounts, between 2,500 and 2,600 corporate and individual accounts have paid about N72 billion within 75 days, with over 40,000 still left “If N72 billion is shared among the 36 states of the federation, plus the FCT, and ask them to buy the Sunday-Sunday malaria medicine (Daraprim) for N2,000 for their hospitals, it will cure every child between one and five years of malaria fever. If you allow children to die of malaria, because of people who refuse to pay taxes and there were no such money to buy the drugs, that is a crime against society. “For people to operate within the society, make money from the services they provide to us through their businesses and they refuse to pay tax, is criminal. It’s not highhanded. These people are criminals,” Mr Fowler said. Strategies to boost revenue generation On what the agency is doing to boost revenue generation and bring every eligible taxpayer into the tax net, Mr Fowler said the lien on people’s accounts began with accounts with about N1 billion balance and above. He said later, the figure was lowered to N100 million and above, which realised about 7,793 accounts initially. According to him, 418 people reached an agreement with FIRS by coming forward to make some payments of about N31.7 billion. Also, those with N100 million to N1 billion were 34,943, with a total of 2,148 paying N40.8 billion in the last two and a half months, he said. On suggestions for the prosecution of those who failed to take advantage of the VAIDS window regularise their tax status, Mr Fowler said he did not consider that a viable strategy ”than the one they are currently adopting”. “How many cases can the FIRS have in court? How many prisons can we have? We are looking at close to 40,000 business accounts that are not doing the right thing. You take them to court? “But, how many cases can the FIRS go to court over from the 40,000? Without any attempt to talk negatively about our legal system, if you go to court, you can be there for one year or more. “But, within 75 days, we have collected over N72 billion, without going to court, by closing their accounts. If we decided to go to court, I am sure even the courts can’t handle up to 20,000 cases of this nature,” he said.   Source: Premium time

MTN Nigeria Communications LTD has been accused by Babatunde Fowler, chairman of the Federal Inland Revenue Service (FIRS), of deducting tax from the N330 billion fine it paid to the Nigerian Communications Commission (NCC). The penalty was imposed in 2015 over SIM card registration infractions. Fowler maintained that fines and penalties for regulatory infractions are revenues paid to the Federal Government and should not be subjected to any tax deduction. “The MTN took a position that the fine or penalty should be tax-deductible. But the FIRS said that does not make sense. One cannot be given a penalty or fine, which is a punitive measure, and the company is saying it is tax-deductible so that it will get a tax credit on that,” the FIRS boss added. The NCC had in October 2015 imposed a fine of N1.04 trillion on the telecommunications giants for non-compliance with a deadline set by the Commission to disconnect all unregistered SIM cards.  The move by NCC followed accusations by mobile phone users that the regulator had failed to bring operators to account for poor services to subscribers. The regulator later reduced the fine to N780 billion in December 2015, having taken into consideration the stability of the telecommunication sector. The fine was further reduced to N330 billion after MTN agreed to be listed on the Nigeria Stock Exchange (NSE).  The agreements have now been fulfilled by MTN, including the listing of 20.3 billion shares in May this year.   Source: Sahara

Intel-owned Altera Corp. received more industry backing as some of the biggest names in tech and tax urged the Ninth Circuit to review a cross-border tax case with potentially billions of dollars at stake. In multiple briefs, the giants urged the U.S. Court of Appeals for the Ninth Circuit to hold an en banc rehearing after a panel upheld Treasury regulations affecting taxes on certain transfers within multinational companies. The companies behind the Aug. 1 briefs include Google LLC, Apple Inc., Facebook Inc., PepsiCo Inc., PwC, Deloitte Tax LLP, KPMG LLP, and the National Association of Manufacturers. Altera wants the Ninth Circuit to review the June 7 ruling that Treasury acted lawfully in requiring related parties—such as entities within a multinational company—to share the costs of stock-option compensation in qualified cost-sharing agreements. These are agreements to share the costs of developing property in exchange for sharing income generated by the property.   Source: Bloomberg