Tobi Aminu

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: Today.ng

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

Indications emerged on Sunday that the Chief of Staff to President Muhammadu Buhari, Mr. Abba Kyari, has queried the Executive Chairman of the Federal Inland Revenue Service, Mr, Babatunde Fowler, over alleged discrepancies in tax collections from 2015 to 2018. A letter dated August 8, 2019, and addressed to the FIRS chairman, which was signed by Kyari, asked Fowler to explain reasons for ‘significant’ variances in budgeted collections and actual collections of tax in 2015, 2016, 2017 and 2018. In the concerned years, the actual amount collected as tax fell below the budgeted target. In 2015, actual collection was 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. Fowler was appointed chairman of the FIRS in August 2015, but his appointment was confirmed by the Senate in December of the same year. The query covers the period he has been in office. His tenure is expected to expire at the end of August, going by the date he was appointed, although there are also suggestions that the expiry date could be December, the month his appointment was confirmed.   Source: Punch

The National Board of Revenue (NBR) has taken an initiative to introduce a mobile application and software, aiming to check cases of tax evasion and increase the number of taxpayers. The revenue-collecting authority thinks launching of the app and software will bring dynamism into the revenue administration, and help bring a large number of eligible taxpayers under the tax net, an NBR senior official told the news agency. According to the existing income tax law, any business entity and service-providing person must hang the taxpayer identification number (TIN) in their offices or business organisations. But it is not practised properly, which causes confusion as to whether the business or service-provider have their TINs or not. “That’s why NBR is planning to make it mandatory to hang tax payment certificate,” said the official. He said using the software, all 649 tax circles will be linked to the mobile app. Through this app, anyone will be able to check whether the tax payment certificate is genuine or effective, or an expired one. “With the app, it will even be possible to lodge complaints with the respective tax circle,” he said. The NBR official hoped when businessmen see customers checking whether they have paid taxes or not, they will feel obliged to pay their taxes. “As a result, revenue collection will increase and tax evasion cases will come down,” he said. Through the app, it would be possible to check the status of tax payment and the certificate will automatically be cancelled in absence of regular payment. Ineffective certificate means the particular person or organisation does not pay tax. “There’s no need to provide extra information in this regard,” the NBR official said. He also mentioned that NBR is trying hard to increase the number of taxpayers to one crore within the next two years. As part of the initiative, a tax survey has started. “Enhancing capability in technology will help us bring more dynamism into tax administration,” the official said.   Source: The Daily Star

Apple is heading to court next month to fight a 13 billion euro ($14.4 billion) tax bill handed down by the European Union in 2016. Europe’s General Court will hear Apple’s appeal on Sept. 17 and 18, Bloomberg reported Friday. The case relates to the bill that the EU Competition Commission ordered Ireland to recoup in August 2016. The commission asserted that the tech giant had an unfair advantage that allowed it pay less tax than it should in Ireland, where its EU headquarters are located.  Apple CEO Tim Cook denounced the tax bill as “political crap” and vowed to appeal. The US government tried, but failed, to intervene. Ireland, which has a tax system that attracts many US tech companies to its shores, also disagrees with the EU’s decision and will argue alongside Apple in court. Apple has already started repaying some of the money the EU says it owes. The money is currently in an escrow account. The company didn’t respond to a request for comment. The case is one of several current appeals against Europe’s tax decisions related to multinational companies. A spokeswoman for the Competition Commission declined to comment.   Source: Cnet

The Federal Inland Revenue Service (FIRS) issued a Public Notice today, 14 August 2019, directing taxpayers, particularly companies in the Fast Moving Consumer Goods sector, to deduct and remit withholding tax and value added tax on the “compensation” due to their distributors, dealers and agents.  The FIRS defines “compensation” to include commission, rebates, etc., granted in the form of cash, credit note or goods-in-trade.  The FIRS claimed, in its Public Notice, that some companies have not been complying with the provisions of the Companies Income Tax (Rates, etc. Deduction at Source (Withholding Tax) Regulations S.1 10 1997 (sic) and Paragraph 3.8 of its Information Circular No. 2006/02 of February 2006.  The FIRS, therefore, noted that it would commence monitoring of compliance with its directive by relevant companies.   Source: Proshare