Tax preparation services

As a means of fighting tax evasion, the Kenya Revenue Authority (KRA) has announced plans to install Electronic Tax Registers (ERTs) at business establishments in the country. The ETRs will grant KRA real-time access to invoices issued by traders around the country. By law, businesses with an annual turnover of at least Sh5 million will be required to get this electronic tax register. Traders, manufacturers, and suppliers will also be required to install the new Internet-enabled ETRs which allow the taxman track business conducts using invoices of every transaction and assess the tax due on a real-time basis. The planned deployment has the legal backing of VAT Act 2013, a law which prohibits the use of hard copy cash sale receipts and invoices. To ensure compliance, the system will require traders to seek permission before performing any business the next day. This means incorrect or incomplete data logged in the previous day could lock them out. More so, control units are required to send end-of-day summary after all the invoices for the respective day have been transmitted and before starting invoice transmission for the next day. Once the new device is out, however, manufacturers are expected to bear the cost of compliance and procurement. Traders and manufacturers may as well choose to pass it to the customers.  On the aspect of procurement cost, Nikhil Hira, a tax expert and director at law firm Bowman’s Kenya said, “I assume that once the machines have been sourced, taxpayers will be told to purchase and start using them – of course, this means additional cost for taxpayers.”  KRA has consistently missed its targeted annual growth in tax returns for reasons being tax-related misconduct such as theft, cheating in the declaration of return, corruption, collusion and soliciting bribes from tax cheats. The agency, under the newly appointed Commissioner-General James Mburu, is expected by the Treasury to collect Sh1.87 trillion in taxes in the current financial year, up from the Sh1.65 trillion it was expected to rise in the just-ended financial year. The government of Kenya has over the years tried to restrain tax evasion by implementing different systems ranging from the Integrated Customs Management System (iCMS) to the Simba System and now, the ETR. Recently, seventy-five KRA staffs were arrested and detained in a tax evasion scandal. In April 2018, KRA got a businessman arrested in a sophisticated tax evasion case ever witnessed in the country. He was charged with counts relating to evading payment of about Sh7 billion in value-added tax (VAT) and income taxes. In November last year, President Uhuru Kenyatta directed the KRA to use the Sh3 billion Huduma Namba (a new National Integrated Identity Management System) biometric data to catch tax cheats. With this new system coming into play, KRA can monitor businesses incomes and businesspersons will not be able to reduce their tax liability without being noticed. This will allow the government to put taxes generated into public service development. Improving tax revenue has always been a top issue on the agenda of most African governments. In March 2019, the Nigerian government introduced new taxes in a bid to increase the revenue of the country. Also, the Togo Revenue Authority (OTR) is the first in the 14-member CFA franc zone to unify national tax and customs services. Since it was created in 2014, the OTR has successfully streamlined both processes and cut staff numbers by 17 percent. Togo saw tax proceeds increase by 23 percent the year after the OTR was created.   Source: Ventures Africa

The Federal Inland Revenue Service (FIRS) and the Tertiary Education Trust Fund (TETFund), have concluded plans to generate more funds through the education tax collection from non-oil sector to finance tertiary institutions and their various projects. TETfund’ Executive Secretary, Suleiman Bogoro, speaking at an interactive forum for stakeholders, themed: “Mitigating the Challenges of Education Tax Collection in a Recuperating Economy”, Bogoro noted that FIRS is making considerable efforts to grow taxes from the non-oil sector, while it looks forward to an increase in Education Tax from the present two per cent to four per cent of Assessable Profits. He said an increase in tax collection would translate to more funds to finance institutions’ projects, thereby improving education quality.“State governments, who establish most of the institutions, abandoned their funding, particularly in the area of capital projects to TETFund. This has to some extent reduced our impact in funding the education sector,” he said.  The Chairman, FIRS, Dr. Tunde Fowler, represented by Special Assistant, Mr. Aina Abiodun, said tax payment is important and everyone should pay for a better Nigeria.   Source: Punch

Failure of Midwestern Oil and Gas Company Limited to pay the outstanding tax liability due to the Federal Republic of Nigeria in the sum of $97,086,985.00.has prompted the Federal Inland Revenue Service to drag the company before a Federal high court in Lagos south west Nigeria. In an affidavit sworn to by Mr Ayodeji Jolaoso, a legal practitioner from the law firm of DAC legal practitioners, and filed before the court by Barrister Dapo Akinosun, the deponent averred that, as normal obligatory routine, Mid Midwestern Oil and Gas company filed its assessment notice for the year 2012-2013 which was delivered to the Plaintiffs showing that it made profit of $271.9 million and $173.6 million in the two years Federal Inland Revenue Service (FIRS) verified the company’s claim in its self assessment and discovered that the defendant did not pay any amount as its Petroleum Tax and Educational Tax for the year 2012 and 2013 respectively. FIRS thereafter assessed the company based on its declared profit for the year 2012 and 2013. It issued and served a notice of assessment dated 29th January, 2015 and demand notice 11th April, 2018.indicating the outstanding tax liability of the company covering Petroleum tax and educational tax. The break down of the outstanding tax liability of the company are as follows 1. Petroleum profit tax liability for the year 2012 is $65,065,644.00 2.Petroleum profit tax liability for year 2013 is $28,024,364. iii Education tax liability for year 2012 is $2,436,340. iv Education tax liability for year 2013 is $1,565,638.00 The total amount of the outstanding tax liability of the company due to the Government of the Federation from the taxes stated above is $97.086,985.00 The company did not raise any formal objection to the assessment and has since refused to pay the outstanding debt. The Plaintiff instructed its solicitor who wrote a letter further reminding the company of the demand for remittance of the outstanding tax liability. In attempt to settle this matter amicably, the plaintiff’s solicitor also invited the defendant to a meeting to discuss the payment of the outstanding tax liabilities highlighted above and other issues arising therefrom by a letter dated 19thSeptember,2018. The defendant has refused and neglected to pay its outstanding tax liabilities as assessed by the plaintiff despite all attempts made by the FIRS to ensure the remittance of the company’s Petroleum Profit Tax and Education Tax for the years for the years 2012 and 2013. Consequently, the FIRS,is urging the court to direct Midwestern Oil to pay its outstanding tax liability arising from the Petroleum profit tax, and Education tax assessed in the sum of $97,086,985.00. FIRS is also praying the court to direct the company to pay penalty of N10,000.00 daily as consequence of late payment of the tax due from 1st February, 2015.till the date its tax liabilities are remitted as prescribed by section 51(1) of the Petroleum. Profit Tax Act (PPTA) cap P13,Law of the Federation 2004 and Education Tax Act. CapE4,Law of the Federation of Nigeria 2004. Midwestern Oil and Gas Company has not file any defence. meanwhile the case has been adjourned till after court vacation for hearing.   Source: the news

The Tax Appeal Tribunal sitting in Abuja, on Tuesday fixed Aug. 16, for Report of Settlement a suit filed by a company, “M FIFTEEN” Consultants against the Federal Inland Revenue Service (FIRS) and one other. The company dragged the FIRS, before the Tax Appeal Tribunal over alleged double taxation. Also joined in the suit are the Independent Electoral Commission (INEC) and the Nigeria Police. The company, said it was dissatisfied with the FIRS assessments of its Tax Liability. The Chairman of the tribunal, Mrs Alice Iriogbe, fixed the date after the appellant’s counsel, Mr Ifegbunachi Onwo, said parties had started and were currently taking steps to settle out of court. Iriogbe said: “since parties are disposed to settlement, the matter is adjourned until Aug. 16 for Report of settlement or continuation of hearing”. Earlier, Onwo sought for an adjournment to enable parties to meet and cement details. Also, the respondent’s counsel, Mr Adebayo Ogunmola, told the tribunal that there was a partial position as the appellant counsel had called him twice but parties have not been able to meet, he further stated that they were fully disposed to settlement and hoped it would not be a total waste of time. Also, INEC’s counsel, Mr Nnamdi Onyenwu, submitted that he was ready to incorporate the first respondent counsel’s position and was ready to align with the decision of other parties. NAN also reports that the company specifically said that it was dissatisfied with an intent letter by the FIRS imposing a tax liability of N14. 662 million on it without due consideration of all the material and available facts. The company further stated that the N7. 9 million captured as part of the tax liability have already been deducted at source by the FIRS and the police from the contract sum of the appellant. The company argued that it would amount to double taxation if FIRS expected the appellant to pay same again. It therefore sought the order of the tribunal to declare as null and void, the intent letter by FIRS dated April 7, 2014 . The company also sought an order of the tribunal directing INEC and the Police to show evidence of remittances to FIRS of the sums deducted from the payments made by the appellant in respect of contract executed. The appellant also asked the tribunal to direct that credit should be given to the appellant in respect of the tax deductions made on payments due to it from the INEC and the Police totalling N7. 9 million. The company further sought an order directing FIRS to issue it a tax clearance certificate which was withheld for the 2006 to 2011 year of assessment. Source: Leadership

A law firm, SimmonsCooper Partners, alleged by a newspaper report to be associated with or involved in a N100 billion tax evasion scandal with Alpha Beta Consulting Limited, has refuted the allegations and given the newspaper 72 hours to retract the accusation or face legal actions for defamation and malicious falsehood. The report alleged the law firm, formerly headed by Prof. Yemi Osinbajo SAN, before he was elected the Vice President of Nigeria, served as Company Secretary to Alpha Beta Consulting Ltd. In a statement signed by the Managing Partner of SimmonsCooper Partners, Mr Dapo Akinosun, yesterday, the law firm refuted the story, stating that it is not involved neither does it have a link with the alleged tax evasion. He further stated that the firm has never been retained by Ocean Trust Limited to offer secretarial services as alleged by the newspaper report. “As is custom with filings as Company Secretary, there is no acceptance letter by the firm consenting to the purported appointment, or any other filing undertaken by the firm as Company Secretary at the registry of the Corporate Affairs Commission”, he said. Akinosun acknowledged Osinbajo as a “one-time senior partner” of the law firm who resigned from the firm upon his election as Vice President of Nigeria, in line with international best practices. “SimmonsCooper Partners is a product of the combination of her members’ intellectual capital, industry and integrity garnered for several years. We are proud that Osinbajo continues to epitomize these values even in public service. “SimmonsCooper Partners intends to seek redress to the fullest extent available in law and has requested the newspaper to do all of the following: Remove from publication in their entirety the defamatory publication and all online threads to prevent further harm to the firm’s business; produce an apology and a declaration that the allegations referred to are false and defamatory and cause such apology to be published in each of the forums which have given or could give reason for our complaint; make proposals for the payment to us of damages for the harm caused to our reputation; and undertake to actively monitor and delete any newly published defamatory content relating to the firm. “If the defamatory publication and threads are not permanently removed and the above undertakings are not complied within the stipulated period, SimmonsCooper Partners reserves the right to undertake further action as appropriate.”   Source:  guardian

The Joint Tax Board (JTB) Chairman, Mr. Tunde Fowler, on Thursday, expressed optimism that 45 million Nigerians would be within the taxpayers’ net before the end of the third quarter of 2019. Fowler disclosed this at the inauguration ceremony of the new South West Regional National Taxpayer Identification Number (TIN) registration system and consolidated national taxpayers’ database in Lagos. Fowler, who is also the Executive Chairman, Federal Inland Revenue Service (FIRS), explained that the new system would promote a tax-friendly environment. He noted that the last four years had seen the expansion of the tax base from 10 million to 20 million tax payers with the potential for an increase of up to 45 million before the end of the third quarter. The JTB boss added that there had been growth in the Internal Generated Revenue of states by 46.11 per cent from N800.02 billion in 2016 to N1.16 trillion in 2018. According to him, growth in FIRS collections increased by 53.81 per cent from N3.30 trillion in 2016 to N5.32 trillion in 2018; with the 2018 total collection of N5.32 trillion being the highest collection ever in the history of FIRS. He said non-oil revenue accounted for 54 per cent with a collection of N2.85 trillion during the period. “We hope that this gesture will encourage state governments to also promptly remit all Withholding Taxes and VAT due to the Federation Account,” Fowler stated. Fowler said the new system would reinforce the laudable efforts of the present administration towards building a robust tax-revenue system, promoting a tax-friendly environment. He added that the system will also ensure a sustainable and inclusive economy for all Nigerians. Fowler noted that the new tax system, while improving the efficiency and output of the entire tax administration process, was meant to provide convenience to both the taxpayers and the tax administrator. He said the new system guaranteed that each taxpayer’s details were readily available to them at their fingertips all times. Fowler stated that the South West Geopolitical Zone was the largest contributor to total IGR collection at the sub-national level with 45.6 per cent contribution in 2018. He added that Lagos State had continued to carve a niche for itself in terms of innovation and dynamism in tax administration. Fowler said the new system would consolidate the efficiency and effectiveness of the tax administration process. The JTB Executive Secretary, Mr Oseni Elamah, said the dynamics of change globally, especially as it related to information and communications technology had made it imperative that domestic tax-revenue the administration met up with emerging trends. Elamah said the new TIN Registration System and its consolidated database of individual and corporate taxpayers’ had been designed to form the foundation upon which the nation’s automated tax administration system was built. “The new system is a web-based solution that offers access to authorised users to initiate a TIN request from the comfort of their homes/offices real-time online, verify their tax status and print their TIN certificate. “It is a transparent system that assures timely and accurate collection and recording of basic identification data. “It also permits the tax administrator to understand its taxpayer base for effective revenue projections and other planning activities. “By leveraging on existing data from relevant identity management agencies, the new system reduces the burden of multiple registrations of taxpayers as well as promoting the ease of doing business and paying taxes,” Elamah said. Also speaking, Lagos State Governor, Mr. Babajide Sanwo-Olu, said identity management (IM) had been a major challenge in virtually all spheres of activities in the country and tax administration was no exception. Sanwo-Olu stated that the new JTB National TIN Registration System was a welcome addition to reforms focused on taking identity management and tax administration in Nigeria to the next level. He agreed that Nigeria’s tax revenues continued to underperform their actual potential, and that Nigeria tax-to-GDP ratio was one of the lowest in the world at less than seven per cent. The governor commended JTB for rising up to the challenge with the introduction of a smart, innovative and technology-driven the solution that was credible and had the added benefit of universal acceptability.   Source:  Daily times