TAX SERVICES

Taxpayers in Rivers State are regarded and treated as development partners, so declared the Rivers State Internal Revenue Service (RIRS). The Executive Chairman of the Board, Adoage Norteh, who disclosed this in Port Harcourt, said this is the reason why taxpayers were made to be part of the process in the informal sector tax initiative being rolled out in Rivers State this month.  Norteh told BusinessDay in an exclusive interview that the regard shown to the taxpayers informed the decision to set up a joint committee of tax paying groups and the RIRS which recently submitted a resolution on taxes that would be paid and applicable rates, a resolution aimed at calming tensions to promote ease of doing business in Rivers State. The RIRS had made the private sector to lead the discourse as chairman and secretary, thus removing all fears that the committee was rather a rubber stamp. This is expected to send positive signals to the entire taxpaying community in Rivers State that an acceptable and peaceful tax collection system is born. Other states having chaotic informal sector tax collection systems could also borrow a leaf, sources said. The presumptive tax committee consisted of the chairman of the Rivers State Joint Committee on Implementation of Informal Sector Tax Collection, Uba Obasi, who represented the Manufacturers Association of Nigeria (MAN) in the state, backed by the secretary of the committee, representing the Nigeria Bar Association, Port Harcourt Branch and Clement Akanibo from the organized private sector and member of the Port Harcourt Chamber of Commerce. Other members include: National Association of Small Scale Industrialists, Pillars of Association, Rivers State Drivers Cooperative, National Union of Road Transport Workers, Tricycle Operators and Traders Union, among others. Obasi, representing MAN as chairman of the committee said the objective was to look into how the RIRS could capture the revenue of the informal sector in the state. He told newsmen that it was also to eliminate multiple taxes and usher in peace in the tax collection process. He stated: “We have just endorsed the report we fashioned out and it would be forwarded to the Executive Chairman of the RIRS. If approved, it would bring to an end the problems bedeviling tax collection mechanism in the informal sector tax collection in the state. We need the information to spread to all taxpayers in Rivers State in order to protect the tax process from touts and ensure that collections made get to the coffers of Government. However, the Revenue Board has agreed on how to collect taxes from the informal sector which is expected to take off this August.” Explaining the significance of the historic resolutions, the RIRS boss reminded taxpayers that the Rivers infrastructural development and facilities can only be sustained through their collaboration and cooperation.  It is noteworthy that Rivers IGR did not crash when other aspects of the national economy faced challenges and when many businesses collapsed. Instead, the IGR of the state recorded modest increases. According to sources, IGR rose from an average of 5.5Bn per month in 2016 to about 10Bn monthly in 2017 when the present tax administration took over. This is expected to further rise given these Informal Sector tax initiatives. Norteh observed that the beauty of it all is that the state’s IGR increases were achieved without fracas and without street wars, but rather with an engendered friendly tax atmosphere. This atmosphere has been capped with historic tax resolutions reached last week in Port Harcourt between the RIRS and private sector leaders. This first-ever resolution is expected to form the bedrock of the roll-out of the informal sector tax drive after many months of consultations, conferences and stakeholder sessions in Port Harcourt. The RIRS admitted that the engagement processes and conference series may have caused long delays and cost huge resources but that it remains the best strategy that could meet the cardinal objective of taxation in the state.  Gov. Wike had given a clear mandate that taxes must not be collected with chaos, violence or tension in Rivers State. In order to achieve this objective, the RIRS undertook to engage stakeholders in organised conferences and meetings to get everyone on board for a seamless process.  Norteh said; “Taxes are a creation of the law; however, it should not be approached from a punitive perspective. Though it is mandatory by law to pay taxes, taxpayers should be made to see it as not only a requirement of the law but also a demonstration of responsibility. Taxes hold numerous benefits; besides, it should be seen as a duty and from responsibility standpoint.” Norteh explained that it is for this reason that the RIRS hopes to host a National Tax Roundtable in Port Harcourt to deepen the state’s new tax engagement processes that have engendered peace in tax collection. Experts said it is time the state positioned Port Harcourt as a tax-friendly city; a city of tax collection creativity and tax ideas. “We think it’s time we changed the Rivers narrative that will address the positives of taxation.” He stated: “I was able to create the engagement process with support of taxpayers as we prepared to roll out the informal sector tax drive because I am not more a tax administrator than I am a taxpayer.”   Source: Business day

The Edo State Governor, Mr Godwin Obaseki, has said that the state will partner the Chartered Institute of Taxation of Nigeria to drive advocacy campaigns, so as to widen the tax net in the state. Obaseki said this when members of the Benin District Society of the CITN paid him a courtesy visit at the Government House in Benin City. In a statement, he explained that the collaboration would help the state government deepen advocacy programmes to sensitise members of the public on their civic responsibility to the need to pay taxes. The governor noted that the state government needed to expand its tax net to sustain its developmental strides, adding that focus in the past was corporate organisations, while neglecting about 70 per cent of the labour force and those who operated the Small and Medium Enterprises in the state. He said, “Government relies on the economic activities of its citizens for sustenance. This is done through taxation. We need to emphasise the need for citizens to develop a habit of paying tax. We also need to tweak the system so that owners of the SMEs will be conscious of the fact that they need to pay taxes.” Obaseki also noted that people who earned more in the society should pay more taxes while urging political leaders to pay stipulated taxes based on their income. He assured members of the institute of government’s support and promised that the state would allocate a parcel of land for the institute to build its Benin secretariat. The President of the institute, Dame Simplice, commended the performance of the Obaseki-led administration in setting up industrial clusters in the state to encourage production.  She noted that the institute was ready to partner  the Edo State Government in its initiative to improve revenue collection, urging the state to support some of its programmes, which included exchange programmes and study tours.   Source: Punch

Some economic experts at the weekend expressed doubts over the ability of the Federal Inland Revenue Service (FIRS), to meet its N8.2 trillion revenue target for 2019 FIRS is the main agency of the Federal Government charged with responsibility of accessing, collecting and accounting for tax and other revenues accruing to the Nigerian authority. According to those who reviewed the Service’s rather ambitious target for the current financial year, relying on the improved collection recorded in the past few years  to index tax collection for the year under review would only amount to an illusion given the current parlous state of the nation’s economy. They observed’ “Although the economy  has tremendously recorded improvement and increase in tax collection due to some reforms being carried out by FIRS to boost tax administration in the country, the dream of the FIRS to meet the N8.2 trillion revenue target may be a tall order in the face of excruciating financial downturn on the part of  businesses in the country.” Going by the revenue target figures reeled out by the Executive Chairman of FIRS, Babatunde Fowler, on the sidelines of a high-level meeting on illicit financial flows hosted by the UN General Assembly in New York recently, about N1.5 trillion revenue had been collected between January to May 15, 2019. The amount realised between January and the middle of May represents a paltry 18.7 per cent of the set target by FIRS. NAN which did the analysis noted that its effort to get an updated report covering the first and second quarter of the year proved abortive. But available statistics showed that FIRS generated N12.62 trillion revenue from tax over the last three years. A 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. 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. Akinsanya explained that the tax 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 for 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.   Source: The Sun

The German Environment Agency has advocated making cars with high carbon dioxide emissions more expensive given the boom in the purchase of sport utility vehicles in the country. “We must find measures to promote climate friendly transport, Federal Environment Agency president, Maria Krautzberger, told dpa on Tuesday. A proposal from the agency is an income neutral bonus penalty system for new vehicles. A penalty would be levied on cars with high CO2 emissions through a tax increase over several years. Also, bonus would be paid through targeted promotion of cars with low CO2 emissions. The agency made the comments after sales of SUVs increased sharply again in July.   Source: Punch

Oyo State government has promised that it will not increase tax on small and medium scale enterprises, SMEs, as a means of boosting its revenue base. Giving this assurance, the Chairman, Oyo State Board of Internal Revenue, BIR, Aremo John Adeleke, in a chat with newsmen at his office in Ibadan, stated that the State would re-visit the State’s tax net and capture areas not already captured in order to improve internally generated revenue. He added that Governor Seyi Makinde’s government would seek for ways to build and nurture the growth of SMEs in the State rather than to burden them with heavy tax that could drive them out of business. Adeleke stated, “It is in line with the promise of governor Seyi Makinde to empower small scale businesses in the State to propel growth in our economy. As he works assiduously to attract foreign and domestic investments to the State, he is also working to establish and sustain small and medium scale industries in Oyo State. So the idea of tax increament on businesses is not even to be discussed here. We will rather nurture them to grow and be self-sustaining than to over-burden them with tax”. “The government nonetheless expects all SMEs to comply with all extant tax laws, especially the ones on personal assessment of business proprietors, withholding tax and VAT payable to the State”, he added. Aremo Adeleke enjoined commercial vehicle owners and drivers as well as motorcycle riders and owners to collect necessary documents from approved agencies and tax stations under Oyo State internal Revenue Services instead of doing same in neighboring States. He said “We assure everyone of quick turnaround time of registering or renewing vehicle documents. We also promise all our patrons quick availability of number plates for all categories of vehicles.” Adeleke used the occasion to call on the staff of the board of internal revenue to be quick, responsive and work with utmost integrity and professionalism which he said was the best way to support the present administration in its drive for improved internally generated revenue.   Source: Punch

The federal government will soon come up with a resolution on issues bordering on the collection of stamp duties as well as the extension of Value Added Tax (VAT) exemption on capital market transactions, among others, the Vice-President, Prof. Yemi Osinbajo disclosed weekend. VAT charges on transactions in the capital market, which was suspended in 2014 by then Minister of Finance, Dr. Ngozi Okonjo-Iweala to encourage increased trading activities in the market, ended on July 24, 2019. Osinbajo, who was represented by the acting Director General of the Securities and Exchange Commission (SEC), Ms. Mary Uduk, at the awards night of the Association of Issuing Houses of Nigeria (AIHN) in Lagos, stated that VAT exemption, stamp duties and other issues were being addressed currently, adding that a resolution would be announced very soon. A press statement issued by the SEC Head, Public Communications, Efe Ebelo quoted Osinbajo as saying: “We have also commenced work on other aspects of CAMMIC’S requests that require government intervention and would be collaborating with many of you in the capital market community to successfully address them. “My Office is actually represented on the CAMMIC. I will therefore be receiving periodic reports on suggestions to further strengthen our support of your efforts and the market as a whole. “We all desire a capital market that would broaden access to economic prosperity by enabling the emergence of financially responsible citizens, accelerating wealth creation and wealth distribution, providing capital to small and medium scale enterprises and catalyzing housing finance. “Let me therefore commend the Securities and Exchange Commission, CAMMIC and the capital market community for the laudable accomplishments so far recorded in the implementation of the master plan, especially in the areas of dematerialisation of share certificates, e-dividend mandate, facilitation of access to alternative investments as well as various initiatives to enhance the commodities eco-system.” The vice-president described the capital market as essential and key to achieving the economic goals of the present administration as enshrined in the Economic Recovery and Growth Plan (ERGP), noting that the administration has worked hard to ensure a stable macroeconomic environment, which is necessary to attract and sustain investment needed to propel the economy forward. He added: “We see the capital market as an important driver of our growth agenda and we will continue to collaborate with the capital market community to support its efforts to positioning our market to where it should be. This administration and especially my office has supported the ten-year Capital Market Master Plan implementation initiatives since inception in 2015.” He described AIHN as an important player in the Nigerian capital market and commended its members for directly contributing to the economy by aggregating the much-needed funding to support entities in the private and public sectors, adding that government and the private sector need to continue to work together to create sustainable businesses and provide the necessary jobs for the teeming youths. The ERGP of the Buhari administration, he noted, recognises critical sectors for financing to include agriculture, infrastructure, power and SMEs, but added that the government cannot do this alone. According to him, government must evolve from an omnibus provider of citizens’ needs into a force for eliminating the blockages that restrict innovation and market-based solutions. “In this regard, government has collaborated with the capital market community and particularly with members of your association in structuring novel arrangements to fund infrastructure development through instruments such as the FGN Sukuk Bond, FGN Green Bond, Infrastructure Funds as well as the planned trading of tax credit instruments. “Therefore, as you chart the course of the capital market for the next four years, I assure you of this administration’s support and I look forward to working with you and other stakeholders in the financial system to actualize a vibrant economy of our dreams,” he added. In his address, the President of AIHN, Mr. Chuka Eseka, expressed the need for the private sector and the capital market to play driving roles in achieving economic prosperity and development while partnering with the government at all levels. He emphasised the need for market operator role in the financial system value chain to be strengthened to enable the capital market deliver on its role as a catalyst of economic growth.   Source: This days

The Federal Inland Revenue Service (FIRS) may, from next year, ask banks to charge customers five per cent Value Added Tax for online purchases when using bank cards, its Chairman, Tunde Fowler, has said. Mr Fowler, who gave the hint in an interview with newsmen in his office in Abuja, also said the federal government was yet to take a decision on whether to increase VAT or not. Online purchases are increasingly becoming popular among Nigerians with online stores such as Jumia and Konga leading the pack. Many Nigerians also buy from popular Chinese online store, Aliexpress. Payments for such purchases are often made using bank debit and credit cards, and could soon attract the five per cent tax being considered by the FIRS. Although he acknowledged Nigeria was not fully ready for the growing global digitalised economy, the FIRS Chairman said, based on existing laws, the country will adopt a solution suitable to her peculiar circumstance. “We will address the issue of the digitalised economy very soon. There is no global solution to a digitalised economy. “Different countries have taken different solutions to address the problem. Nigeria has not taken a position yet. But, we are meeting to see if we can come up with a global solution that we can all adapt to. “With the existing laws in Nigeria, we can appoint the banks as agents. First of all, all those who make payments for purchases online using bank cards and instruct their bankers to pay, we will tell the banks that, going forward, everyone who gives instructions for service for purchase online, they should deduct five per cent VAT,” he said. “We are thinking that maybe early next year, we will advise banks to start deducting five percent VAT for all online purchases done locally,” he added. Also, the FIRS Chairman spoke on the lingering debate on an increase in the VAT rate from the current five per cent to either 7.5 per cent or 10 per cent. According to Mr Fowler, given a choice between increasing VAT rate and expanding the tax base, he will prefer the latter. “Of course, the first one will be the expansion of the tax base. The tax has to be fair. That’s where we started off. That’s why we have said we have redesigned and issued new tax certificates for VAT. “We have given to all registered taxpayers. We believe we should have effectively at least 1.5 million corporate taxpayers,” he said. He said the FIRS will prefer to address the issue of VAT rate ”after it has achieved its target of bringing all eligible taxpayers under the tax net”. Describing the VAT rate in Nigeria as the lowest in the world, apart from the United Arab Emirates (UAE) that has just introduced five per cent rate, he said VAT is a consumption tax, only payable by choice. “What that means is, if A wants to impress B, and takes B to eat at the Transcorp Hilton, A will pay VAT for services enjoyed. This is because of the environment. “The cost of the Coca Cola they will drink at Transcorp Hilton at N1,000 could have been bought at N100 in any supermarket without paying any VAT. “Also, A can buy chicken, with all the ingredients in the market, cook it and eat without any VAT. But, instead of spending N5,000 for that meal, if A decides to go to the Transcorp Hilton and spend N20,000, then A must pay VAT. It is a choice A has to make,” he added. He said the only exemption for VAT are items required by everybody, like education, medical services, which, regardless of choice, one is expected to have. Despite pressures from the International Monetary Fund (IMF) on the need to increase VAT rate in Nigeria, the FIRS chief said the Federal Government is yet to make any official pronouncement on the issue. “The IMF said Nigeria’s VAT rate is one of the lowest in the world. We had discussions back and forth on the benefits of the increase. My position is to first expand the tax net. “We crossed the N1 trillion mark in VAT last year for the first time. We are equally improving this year. At the end of 2019, if we can have everybody come under the tax net, sign for VAT, start remitting VAT, let’s look at the volume we can generate. “Then we can discuss the way we are, for government to take a decision as to whether VAT should be increased or not,” he said.   Source: Today

To widen its corporate horizon, the Chartered Institute of Taxation of Nigeria (CITN), has renewed its vision and mission statement, with the hope to pursue the actualisation of both with more vigour. The body added that it is also planning to be a leading Institute in training world-class tax professionals. It explained that the planned tax academy would be developed to project the fundamental driving force of its vision, while it will engage all stakeholders with an inclusive mind-set and strengthening other capacity building programmes. New CITN President, Dame Gladys Simplice, said this in her address during her investiture as the 14th president of the Institute over the weekend. She said the tax academy will be repositioned in terms of capacity for a technically-driven alternative route to membership through intensive training for revenue services staff. To admit lawyers into the Institute, she said they will go through extended period for pre-induction training to close the knowledge gap in their accounting and taxation. On the international scene, Simplice, who is also the President of the West Africa Union of Tax Institutes (WAUTI), said the Institute will continue to push for inclusiveness and full membership of member states to broaden their horizon and development with the needed expertise in the sub-region. The special guest of honour, Executive Chairman, Federal Inland Revenue Service (FIRS), Babatunde Fowler, said globally, the issue of taxation is already on the front burner where the profession is seen to be of importance than before. While promising his support for the president, Fowler said Nigeria has attained the position where taxation can be recognised as a choice of destination. Lagos State Governor, Babatunde Sanwo-Olu, represented by the Permanent Secretary, Ministry of Finance, Mrs Balogun, while congratulating Simplice, urged Lagosians to pay their taxes regularly for more infrastructural development in the state. Sanwo-Olu also promised to partner with the institute for development of the state.   Source: Guardian