Tax news

Governments at all levels have been urged to block all channels of tax leakages including avoidance, evasion, and corruption, through strict enforcement of tax laws. A Development Consultant Kolawole Banwo made the call at a meeting on the ‘Tax Justice and Breaking Barrier Project of ActionAid Nigeria organized by Rural Women and Youth Development in Sokoto. “Tax evasion is synonymous with tax fraud”, he asserted. Banwo noted poor inter-agency collaboration, inadequate data of taxpayer, corrupt tax revenue collection and dependence on human agents, conflict of interest, and political interference in tax administration and predominance of cash-based economy, as among drivers of tax evasion. Others, he said, included inadequate regulations, weak institutions, complex tax computation process, weak regulation of the financial services sector and unethical conduct of facilitating professionals. The Consultant also called for the amendment of relevant tax laws and policies to reflect current realities, the introduction of automation of tax system, employment of ICT to reduce human involvement in the tax collection as well as streamlining and democratization of the process of granting incentives. He stressed the need to acquire and regularly update taxpayers’ data, publish details of all legitimate taxes and relevant authorities and circulate widely, professionalize, train, re-train and adequately remunerate officials and staff of revenue authority and establish an effective grievance mechanism for complaints to resolve of Taxpayers’ issues. Banwo urged the harmonization of Tax Identification Number (TIN) with the FIRS and promote cashless transactions.   Source: Daily Trust

The Federal Inland Service (FIRS) has suspended the accounts owned by Obasanjo Farms, Iyiola Omisore and Davido Music Worldwide Ltd. Latest Nigeria News understands that the “bond” is a right to maintain possession of a property (accounts) that belongs to another person until a debt of that person is released. Remember that Babatunde Fowler, executive president of the Federal Internal Revenue Service (FIRS), was consulted by President Muhammadu Buhari regarding alleged discrepancies in tax collection from 2015 to 2018. Latestalert reports that Fowler was consulted in a letter from President Buhari’s Chief of Staff, Abba Kyari, dated 8 August 2019 This online news platform includes that the letter addressed to the FIRS president asked him to explain the reasons for the “significant” changes in budget collections and actual tax collections in 2015, 2016, 2017 and 2018. The Federal Interior Service (FIRS) listed 19,901 accounts that had not yet regularized their tax status. Some of the accounts published include: Citiroof Aluminium Co. Ltd, Coldstone Creamery Limited (Yaba), Davido Music Worldwide Ltd, Grand Square Supermarket and Stores Ltd, Iyiola Omisore & Par, Open Heavens Bliss Enterprises and The Assemblies of God Nigeria. Others are X3M Music Limited, Tiger Foods Limited, Slot Enterprises, Payporte Technology Limited, Visionscape Sanitation Solutions Limited, Erisco Foods Limited Milk Cube account, God is Good Motors (Vehicle sales account), Hubmart Stores Limited, Obasanjo Farms Nig. Ltd (Feedmill) and United Capital Plc. The FIRS, in an advertorial, vowed to enforce the payment of whatever outstanding each company had. “This is to notify all Companies, which had their Bank Accounts placed under Lien by the Federal Inland Revenue Service (FIRS) pursuant to Section 31 of the FIRSE Act, but are yet to regularise their tax status with the FIRS, that if they fail, refuse or neglect to pay the tax due within 30 days of this Notice, the FIRS shall in accordance with Section 49 (2) (a- d) of the FIRSE Act proceed and enforce the payment of the said tax against all the Directors, Managers, Secretaries and every other person concerned in the management of the Companies and recover the said tax from such persons without further notice. “For the avoidance of doubt, the above Section authorizes the FIRS to proceed against and punish every officer, Manager, Director, Secretary or any person concerned with the management of the Company in like manner as if he/she had committed the offence,” it said.   Source: Latest Alert

The Peoples Democratic Party   has said  the alleged discrepancies in the tax collected by  the Federal Inland Revenue Services has confirmed its allegation that the Muhammadu Buhari  government  is corrupt. In a  letter dated August 8, 2019 and addressed to the FIRS Chairman Babatunde Fowler by the Chief of Staff to the President Abba  Kyari,  the FIRS boss was asked to explain the  significant variances in budgeted collections and actual collections of tax in 2015, 2016, 2017 and 2018. But in  a statement  on Monday  by its spokesman, Kola Ologbondiyan,  the PDP  accused   the Presidency of complicity  in the alleged  discrepancies in the  tax collection. Ologbondiyan said, “The party notes that Nigerians are not deceived by the desperation of the  agents of the Presidency to cover its complicity by seeking a fall guy in  Babatunde Fowler. “The PDP says that a critical study of the leaked correspondence from   Abba Kyari to the FIRS chairman in  the wake of the revelation of financial discrepancies at FIRS totally betrays the complicity of the cabal in the Presidency. “The correspondence also further confirms that our nation and its  economy have been in the strangulating grips of a corrupt cabal, who has evidently hijacked the statutory roles and responsibilities of government agencies, leading to the crippling of our system in the last four years of President Muhammadu Buhari’s misrule.” He added, “The stealing of our taxes by APC agents has brought so much anguish to Nigerians who suffer the brunt of collapsed infrastructure, decaying social amenities and a crippled national economy. “The PDP therefore urges the National Assembly to come to the rescue by holding a public inquest into the handling of the  taxes collected by the FIRS in the last four years, take urgent steps to recover the stolen funds and channel such into projects that have direct bearing on the welfare of Nigerians.”   Source: Punch

The Auditor-General of the Federation, Mr. Anthony Mkpe Ayine, has begun deep engagements with key federal agencies in his efforts to improve the credibility of public finance administration in Nigeria. The interface, which involves sharing knowledge with key stakeholders to aggregate a position that will strengthen revenue management, is also To prep them for revenue assurance and Information Technology audits. Ayine has so far visited the Federal Inland Revenue Service (FIRS) and the Nigeria Customs Service (NCS) where he spoke about the Fiscal Governance and Institutions Project (FGIP), a collaborative programme of the federal government and the World Bank, which will see his office conduct revenue assurance audit and IT audit on both establishments. Ayine explained the project’s activities and priorities to include strengthening revenue management collection and accounting processes, in addition to strengthening controls and accountability in the use of public funds and sought the cooperation of the FIRS and NCS in granting his office free access to personnel, documents, databases and IT applications for the purpose of the assignment. “Our engagement here is essentially to ensure that the collection of revenue is lawfully made. We will also verify that procedures and checks are in place and properly applied. We will work to ascertain that accounts are duly kept and appropriate remittances are made to the authorized accounts with the Central Bank of Nigeria,” he said. The Auditor-General added “We will verify and evaluate the efficiency of internal controls and accounting systems and also review where applicable, areas where reforms have been made”. He said further that the essence of the exercise is to improve the revenue of government so as to reduce the heavy financial burden of borrowing on the country. In his remarks, the Executive Chairman of the FIRS, Babatunde Fowler, while appreciating the visit, thanked the Auditor-General for his support towards the service and sought his assistance in ensuring that on a monthly basis, VAT and Withholding Tax deducted, are remitted to government. He also spoke on the many reforms undertaken by the FIRS which now makes it easy for anyone to carry out tax activities online without visiting the office or interacting with any official of the service. In the same vein, the Comptroller General of the NCS, Hameed Ibrahim Ali, thanked the Auditor-General for the Resident Auditors who have been of immense benefit to his office and urged for more support in the area of capacity building. He also enumerated various reforms the custom service had introduced to ensure operational efficiency. The FGIP was approved by the World Bank Board of Executive Directors on June 27, 2018 and has four key components, namely: strengthening revenue management, strengthening controls, transparency and accountability in the use of public funds, strengthening economic and fiscal statistics and implementation support. The Office of the Auditor-General for the Federation is one of five strategic institutions tasked to implement the project. The others are the Federal Ministry of Finance, the Federal Ministry of Budget and National Planning, the National Bureau of Statistics and the Bureau of Public Procurement.   Source: Daily Sun

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