September 5, 2019

Kenya plans to tax OTT services like Youtube, Netflix

Kenya’s Information Communication and Technology (ICT) ministry is working on completing a new tax scheme. This framework, reports say, will be used to tax foreign online streaming media services such as YouTube and Netflix. The over-the-top services (OTT) will soon be required to declare the incomes they derive from Kenyan consumers. OTT services include all applications that offer voice, video and messaging services over the internet. Communications Authority Director-General, Francis Wangusi says online content providers exploit the Kenyan industry. Yet, neither the government nor artistes benefit from them. According to Wangusi, “many countries have policies that guide these services and that is where we are heading as a country”. He adds that technologies that will facilitate taxation of OTT services are available.   Source: News Central

Stakeholders say voluntary tax payment key to quality public education

Increase budgetary allocation to education and improve the quality of the sector, government has been urged to sensitise all taxable adults on voluntary payment of Tax.   This was the submission of participants at the end of a two-day stakeholders Forum on Tax and Gender Responsive Schools in Lagos organised by Human Development Initiative (HDI), Norad and Action Aid. The participants also implored the government to adopt equity in tax administration, rather than tax equality, which does not guarantee fairness and Justice in tax administration. They called on the government to increase budgetary allocation to the education sector, as well as building a strong evidence base to raise awareness for adequate Education Tax payment.  The participants also demanded that public education system should be more responsive to all children, especially the girl-child and the marginalised, just as the government should upgrade public schools by providing adequate infrastructure and necessary resources for effective teaching and learning.   Source:  Guardian

Tax: Why FIRS boss Babatunde Fowler was queried

The Executive Chairman of the Federal Inland Revenue Service (FIRS), Mr. Babatunde Fowler, was queried by President Muhammadu Buhari over variances between budgeted collections and actual collections between 2015 and 2018. Multiple presidency sources confirmed the authenticity of the query dated August 8, 2019, and signed by the Chief of Staff to the President, Malam Abba Kyari. “We have observed significant variances between the budgeted collections and actual collections for the period 2015 to 2018. Accordingly, you are kindly invited to submit a comprehensive variance analysis explaining the reasons for the variances between budgeted and actual collections for each main tax item for each of the years 2015to 2018. “Furthermore, we observe that the actual collections for the period 2015 to 2017 were significantly worse than what was collected between 2012 and 2014. Accordingly, you are kindly invited to explain the reasons for the poor collections. ” Newsmen report that the FIRS boss was appointed by President Buhari on August 18, 2015. His appointment was confirmed by the Senate on Wednesday, December 9 of the same year. But one of the sources expressed shock as to how the query was leaked to the press, blaming “Fowler’s enemies” in the system. The source, who does not want to be named, said: “We don’t know how the letter got to the press. Maybe people who don’t like the chairman leaked it. But it is true that the letter was indeed written by the Chief of Staff on behalf of the President. “As you have seen from the content, it is not a query per se. It is just a request for explanation. The request is itself based on the information supplied to the Presidency by the chairman (Fowler) himself,” he said. He said Fowler was asked to come forward with the revenue collection over a ten -year period. “From 2010 to 2014, the FIRS surpassed its targets for each year. From 2015 to date, the FIRS failed to meet its targets every year. So, the idea of the letter is for him to explain the situation as raised by the records he presented. It’s for him to speak, not the Presidency,” the source said. Another source, who also confirmed the query, said the response of the FIRS boss was being expected today. “You know President Buhari is all out to leave behind a legacy at the end of his tenure come 2023 and he needs funds to execute his programmes and policies. It is against this backdrop that the FIRS boss was queried,” the source said, saying he should not be named. Newsmen report that the query is being seen as a signal that Fowler’s tenure may not be renewed. In the years under review, the actual amount collected under Fowler as tax fell below the budgeted target and also low when compared with what was received before he became the chief executive of FIRS. In 2015, the actual collection was put at N3.7tn, while the budgeted target was N4.5tn. A similar shortfall occurred in 2016, when actual collection was N3.307tn, less than the N4.95tn budgeted target. Also, in 2017, the FIRS collected a total of N4.027tn, less than the set target of N4.89tn. In 2018, actual collection was N5.32tn, while the budgeted target was N6.7tn. The FIRS is responsible for assessing, collecting and accounting for tax and other revenues accruing to the Federal Government. In 2007, FIRS got financial and administrative autonomy with the passage of the Federal Inland Revenue Service (establishment) Act 2007. A staff of the FIRS told newsmen last night that there were so many petitions against Fowler. The staff, who spoke on condition of anonymity, said he also saw the query issued by the presidency. “Though I cannot confirm its authenticity, I know very well that there are many petitions against Mr Fowler written by both insiders and people watching happenings in the establishment from outside,” he said. “However, if the query circulating in the social media is true, I want to believe that the presidency only touched on one aspect. There is heightened grumbling within FIRS on staff welfare and entitlements. “There is also disaffection about budgeted allowances for staff that supposed to go on training but only privileged few are allowed to go over the years. “Many of us have been listed for certain mandatory trainings over the years but were not granted permission to go. And most importantly, though many FIRS offices have been opened across the country, they are not operating optimally,” he said. The 63-year old Fowler, who is a tax administrator, had served as the Executive Chairman Lagos State Board of Internal Revenue. Efforts to get reaction from the Head of Communications and Servicom Department, Wahab Gadamosi, were not successful as his phone lines were not reachable up to the time of filing this report.   Source:

Pay tax, end poverty in Oyo —Makinde

The Oyo State Governor, Mr Seyi Makinde, has pleaded for the support of different stakeholders operating in the state on adequate deductions, prompt remittance of taxes and other levies to fulfil his promises on provision of social amenities, enduring infrastructure, regular payment of government obligations and other amenities. Makinde stated this during a one-day sensitisation workshop on computations, deductions and remittances for Federal and State Ministries, Departments and Agencies as well as tertiary institutions in the state held at the House of Chiefs, Secretariats, Ibadan. The governor, who was represented by the Executive Chairman, Oyo State Internal Revenue Service, Mr John Adeleke, reiterated that the intention of the present administration was not going to overburden any business enterprise but would ensure government gets its “fair share of eligible tax revenue.” Makinde said, “Presently, the fluctuations and other complex gyrations of the international oil market and the global economy means unstable and often lower revenue from federal allocation. “The need to look inward to generate enough internal revenue to cater for the much societal demand has never been this much. We count on companies and other businesses to ensure they regularly deduct and remit their employees’ PAYE tax to our treasury. “This will ensure mutual reciprocation of right and duties on the part of all parties. I regard such complying institutions, business and contractors as friends of my government and corporate citizens of this state of enduring opportunities.”   Source: Punch

Fowler Gets Monday Deadline To Explain Discrepancies In Tax Collections

President Muhammadu Buhari has given the Executive Chairman of the Federal Inland Revenue Service (FIRS) Babatunde Fowler till Monday to explain the gaps in tax collections between 2015 and 2018.  Fowler, whose top echelon of his FIRS has in recent times, been under the searchlight of the Economic and Financial Crime Commission (EFCC) for duty tour allowance (DTA) is expected to explain the discrepancies between the budgeted collections and the actual for the period under review. In a letter signed by Chief of staff to the president, Abba Kyari to Fowler whose tenure expires Saturday, the presidency noted significant variances between budgeted FIRS Collections and Actual Collections for Period 2015 to 2018. “Accordingly, you are kindly invited to submit a comprehensive variance analysis explaining the reasons for the discrepancies between budgeted and Actual collections for each main Tax item for each of the years 2015 to 2018. The FIRS Chairman was also queried over Actual Collections for Periods 2015 to 2017 as it was ‘Significantly Worse’ than what was collected between 2012 and 2014. “Furthermore, we observed that the actual collections for the period 2015 to 2017 were significantly worse than what was collected between 2012 and 2014. He was accordingly, invited to give detailed explanations on the reasons for the poor collections during the periods under consideration.   Source: Inside business