August 22, 2019

The Federal Inland Revenue Service (FIRS) in Ebonyi state, has decried the absence of manufacturing companies in Abakaliki, the state capital, a development it said was the challenge facing it. Kenneth Effiong, tax controller, Abakaliki, MTSO FIRS, who spoke to our correspondent in Abakaliki, also told this paper that majority of taxpayers in the state are civil servants. According to him, majority of people in the state are working class compared to other states where there are large concentration of businessmen and companies. “We go out to educate taxpayers on tax matters and possibly, bring them into tax payment.  A lot of businessmen out there are complaining that they are not educated, not being put through on what tax is all about.  So, with the backing of the management, we now decided to use three days to go out and educate taxpayers on tax matters, which is our routine job here as tax office.  “Compare to other states, Ebonyi state has been complying. Everyone knows about FIRS presently. The name FIRS is now a household name in the state. Every family that is into business knows about FIRS and they comply. I think I will give them 60% compliance. “Ebonyi tax payers are trying. I give them 60 percent, but we have challenges. Number one, Ebonyi state is not a business area; and another thing is that the people of Ebonyi are mostly government workers. We do not really have business men in Ebonyi. And the ones we have are contractors; their tax comes when they are able to carry out contracts (projects) unlike in other states, that have industries and major businesses   Source: Orient Daily News

The Federal Inland Revenue Service (FIRS) is the main agency of the government charged with responsibility of accessing, collecting and accounting for tax and other revenues accruing to the Federal Government. There is no doubt that in the last few years, there has been tremendous improvement and increase in tax collection due to some reforms being carried out by FIRS to boost tax administration in the country. The report obtained by the News Agency of Nigeria (NAN) showed that FIRS generated N12.62 trillion revenue from tax in the last three years. The breakdown of the amount indicated that N3.3 trillion was generated in 2016, N4.02 trillion in 2017 and N5.32 trillion was realised in 2018, making it the highest revenue generated so far. With this drive, the management of the service set a target of N8.2 trillion revenue for 2019, but some financial experts and insiders who spoke to NAN on this benchmark, doubted if such revenue could be achieved considering what the service had realised so far. The statistics given by the Executive Chairman of FIRS, Babatunde Fowler recently in New York during the sidelines of a high-level meeting on illicit financial flows hosted by the UN General Assembly, showed that about N1.5 trillion revenue had been collected from January to May 15, 2019. The amount realised between January and the middle of May represented only 18.7 per cent of the said target by FIRS. Effort by NAN correspondent to get an updated report that covers first and second quarter of the year failed. Acting Head of Communication and Servicom Department of the service who gave her name as Kubili said there has been an order from above not to release such document concerning the revenue generated by FIRS. She said if such would be given out, there must be an official request which has to pass through some processes before it may be considered for approval. Another official of the FIRS who pleaded for anonymity corroborated Kubili on the directive not to disclose to the@ public the figures of what had been realised by the service. The source said the reason was largely due to not so impressive figure of taxes collected so far in the year, considering the target of more than N8.2 trillion given by the service as benchmark for 2019 revenue. The source said: “from what I know, so far, we have not collected up to N3 trillion as taxes for half of the year and how do you then think we can achieve the N8.2 trillion target by the end of the year? “Whoever tells you that when you write requesting for such information, it will be given to you is not sincere. “The management does not want to make what has been generated known for now”. Reacting to the said target, a financial expert, Mr Akinsanya Niyi described the proposed collection of N8.2 trillion as ‘a tall order’ meant to spur performances by the personnel of the service, but not necessarily to be achieved. Niyi explained that law allows companies to pay for taxes of previous years up till the month of June of the successive years. He, however said that there was tendency of more taxes to be collected as companies prepared for the new national budget cycle. He explained that many organisations would want to ensure compliance with tax laws so as to position themselves for job bidding. According to him, there is the need for FIRS to ensure continuous sensitisation of the general public to the importance of tax payment as well as the need for strict implementation of some provisions of the laws to boost tax collection. The expert strongly advocated incentives for faithful taxpayers and the need to ensure that tax payment processes were more convenient. Mr Muhammad Sallau, another financial expert and a lecturer with the Federal University, Dutse, Jigawa, advised FIRS to be more proactive. He said the service should target more on collections in largest outstanding debts and also ensure regular updates of the taxpayers register to enhance tax collection. Sallau also called for closure of loopholes on tax laws, simplified tax system to encourage formalisation and compliance as well as enforcement through external checks to achieve expansion of taxpayers database. The expert also enjoined FIRS to reduce tax rates, minimise tax holidays and tax havens, adding that there must be inclusive growth strategies and rebalance tax deals to tackle tax evasion in the country.   Source: Pulse

When taking a fresh look at new technology capabilities and related operating models, chief financial officers (CFOs) may find that they can have it all – a high performing, efficient tax department that’s tightly integrated with finance and the rest of the organisation. By Mark Freer, digital leader for Deloitte Africa Tax & Legal. An unprecedented number of regulatory and tax policy changes are underway around the globe, presenting organisations with significant challenges–and opportunities–for tapping tax earlier and more often when key business decisions have to be made. Failure to modernise may not only leave a company lagging when it comes to compliance, it may also see the organisation outpaced by nimbler, tech-savvy competitors. Yet, many tax professionals tell us their companies are simply not set up for this new reality with finance leaders continuing to respond in predictable ways. They are hiring more people, sourcing temporary help, adding point technology solutions and outsourcing parts of the process. While this has worked in the past, the evolving digital economy is continuously unleashing new competition and innovative business models, both of which can create significant tax planning pressures, but also opportunities. With 50 percent fewer tax accounting graduates and a big chunk of the tax workforce nearing retirement, there aren’t nearly enough experienced tax experts in the market today. Deloitte’s Crunch Time 9: Tax in a Digital World guide shares insights on how new data modelling tools make it possible to deliver valuable tax insights on differing financial scenarios in real time. This essentially means that business leaders will receive the benefits of these insights before they have to make their decisions. Before this can happen however, tax needs to modernise along with the rest of the enterprise. Companies need cognitive tools, bots as well as other technologies (or service providers deploying those solutions) to assist with improving efficiencies in their work and that requires investment that will lead to new ways of working for future relevance. Modernised tax is a move from being mostly a compliance function to a high-value planning and reporting function. Digital tools and talent churn through scores, or even hundreds of scenario models, to determine their after-tax financial implications. This type of data modelling combines the organisation’s own real-time financial information with the latest tax laws and regulations to guide decision-makers through the best options for action. The guide suggests three things that will be visible in an organisation once the shift to a modernised tax department occurs. They are reimagined processes; redefined talent and technology enablers. We see reimagined processes when reconciliations are automated and managed on an exceptions basis. Tax analyses and evaluates the discrepancies while optimising the reconciliation of source data to the general ledger. Touchless automation removes manual reconciliation and accounts payable clerks no longer have to key in tax codes manually or make tax determinations on the fly. Redefined talent leads to tax staff being freed up to focus on tax planning and other high value-add activities. Tax managers generate targeted business insights rather than generic ones, while staff monitor data quality as a key performance indicator. Tax modernisation is also about risk management. In the face of growing complexity, technology enablers such as automation and advanced analytics assist tax teams to efficiently grind through the data and scenarios required for effective tax planning and reporting. Real-time layers of data proactively identify rule exceptions, improving reliability with machine learning. Visualisation and analytics from an integrated tax data warehouse enhance the indirect tax process. The business case for tax modernisation is easy to make for almost any global enterprise. Implemented correctly, it enables better management of the global effective tax rates and with automation, you may be able to effectively apply for tax rebates and reduce cash leakages, such as VAT overpayments. Yet even with a clear business case, your tax department may not push for needed investment as aggressively as other functions might. Tax departments are busier than ever, and many are falling behind, with little bandwidth to consider these improvements. If you’re the CFO, nudge tax along. Even when there’s a great tax leader in place, CFOs need to champion modernisation.   Source: IT Online