Tax preparation services

Summary Recently, the Lagos State Internal Revenue Service (LIRS) issued a Public Notice (PN) disclosing its intention to integrate the LIRS’ Personal Identification Digit (PID) for taxpayers with the national Tax Identification Number (TIN) system using taxpayers’ Bank Verification Numbers (BVN). The PID, which is also known as the Lagos State Government Electronic Banking System (LASG-EBS) Taxpayers Identification Digit, is a unique taxpayer identity code issued by the LIRS to taxpayers in Lagos State while the TIN is a national identification number for individuals or corporate entities for the purpose of tax remittance. According to the PN, the integration will facilitate seamless sharing of taxpayers’ information between tax authorities and other relevant stakeholders. Details The PN provides that the integration is designed to be biometric-based and the LIRS intends to employ the existing BVNs to achieve the planned integration. Furthermore, the PN states that access to the LASG-EBS platform for all transactions such as registration and creation of payer ID for new taxpayers, payments of taxes and validation of taxpayers’ profile etc. will now require taxpayers’ BVN. Accordingly, the PN requires all self-employed individuals to provide their BVNs to the LIRS in order to assist in the creation of their unique PID. Corporate Organizations are also required to ensure that their employees who qualify for tax clearance certificate (TCC) include their BVN in their individual e-TCC forms. The LIRS, in the PN, also assured taxpayers of the safety and security of all data and information in its custody. Implications We expect that the proposed integration of the PID into the TIN would provide the tax authorities with more reliable taxpayers’ information to enable them track down tax defaulters and combat tax evasion. However, it is important that the tax authorities safeguard all data and information of taxpayers, which may be obtained from the integration process to boost taxpayers’ confidence in the system. Thus, taxpayers should engage their tax consultants as soon as possible to obtain professional guidance in complying with the directives under the Notice.   Source: Andersen Tax

The Lagos Chamber of Commerce and Industry has called for the concessionary tax rate for the Small and Medium Enterprise sector of the economy. Making the call in a communiqué issued at the end of its council meeting held over the weekend, the LCCI noted that small businesses were more vulnerable to the current challenges in the economy and suffered high mortality rate as a result. In the communiqué signed by the Director-General, LCCI, Mr Muda Yusuf, and made available to our correspondent on Sunday, the chamber also expressed concerns about the persistent delays in the issuance of the Pre-Arrival Assessment Report to importers by the Nigeria Customs Service. It said the situation contributed to cost escalation for many businesses, payment of avoidable demurrage and high interest cost on borrowed funds. “The protracted delays in the issuance of PAAR is a negation of the policy of the government on ease of doing business. The LCCI, therefore, calls on the Comptroller General of the NCS, to urgently intervene.” The investigating activities of anti-graft agencies and regulatory institutions regarding alleged infractions by corporate organisations also occupied the attention of the chamber. It admonished that such investigation, as much as possible, be conducted in a discreet manner devoid of any form of media hype. “This is necessary to avoid unwarranted reputational damage and erosion of investors’ confidence,” it said. The LCCI added, however, that, “This position does not diminish the significance of compliance by corporate organisations with extant laws and the imperative of proportional sanctions for proven cases of infringements of the law. “The LCCI is a leading advocate of sound corporate governance in the country.  Meanwhile, it is also important that there should be proper coordination between regulatory institutions and anti-graft agencies in dealing with suspected regulatory infractions to avoid duplication of investigative actions.”   Source: Punch

The debate over increasing property taxes continues to intensify and for some Calgary business owners, it’s a fight to keep their business alive. A new social media campaign called “Sorry, Calgary is closing” launched this week and calls for businesses to band together against skyrocketing tax increases. Barre Belle co-founder Kristi Stuart said her property taxes have gone up 15 per cent from 2017 to 2018. She hasn’t received her assessment for 2019 but was told it would be even higher. Two of her fitness studios could be on the brink of closing. “This is the final punch that’s going to knock us out, and everybody’s really mad,” Stuart said Thursday. Stuart and other small business owners have organized a rally for Monday at 7:30 a.m. outside city hall. According to Stuart, the timing is not coincidental. “The reason we’re doing it at 7:30 is because when councillors come into work, I want them to look at the faces that these property tax increases are going to affect,” she said. “Seeing council not respect our city like the way we’re respecting our businesses is irresponsible… In a couple of months, you could go to your favourite shop and it may not be there. We’re trying to be proactive instead of reactive and say, ‘Listen, council, this is not going to fly.’ She’s also behind a petition calling on the provincial government to fire all of Calgary city council, including the mayor. Premier Jason Kenney has said he will not be firing them but Stuart said enough is enough. Ward 9 Councillor Gian-Carlo Carra said council is very aware of the frustrations and its why they have planned an emergency meeting Monday to deal with the tax crisis. “There’s a lot of shock,” he said. “People are feeling gut-punched and they’re feeling freaked out… We’re proposing a final one-year fix that will hold our tax levels at 2018 levels. “The fix, however, would be a temporary one.   Source: Global News

Workers of the Revenue Mobilization Allocation and Fiscal Commission have disagreed with the management of the organization over the use of consultants to probe banks for failure to remit all they collect on behalf of the government agencies in charge of taxes and levies. The workers had staged protests for two days last week where they drew the attention of the management and members of the public to the plight of the workers whom they alleged were being rendered redundant through the use of consultants in what should have been their sphere of influence. Following the two-day protests, the management of RMAFC opened a consultation with the Association of Senior Civil Servants of Nigeria, RMAFC Chapter. Chapter President of the association, Mr Martin Adeoye, in an interview with our correspondent, said that the talk would continue as it had not yet produced the required results. Adeoye said that the association was not completely against the use of consultants by the management of RMAFC to do its work but added that a situation where the workers were completely neglected was not acceptable. He said, “If they attach two or three members of staff to a consulting firm, we would not be angry. It is by embedding members of staff among the consultants that the capacity of the workers is built. If they completely neglect us, why are we here?” Adeoye said that the organization had almost 1,000 workers scattered in different parts of the country, adding that if they were adequately trained and deployed, consultants would not always be needed for the verification exercises that were carried on by the agency from time to time. He disclosed that the association would continue the talks with the board of RMAFC which he said would soon be inaugurated following the screening of the members by the National Assembly. The various probes instituted by RMAFC into tax remittances by banks, withholding taxes and Value Added Tax, had to the recovery of N268bn into the federation account. According to the agency, the recent verification and reconciliation of collections by banks had led to the recovery of over N73bn recently.   Source: Punch

The ecommerce sector will experience a minor slowdown as government begins implementing automatic and direct collection of VAT on online transactions in Nigeria. See it this way: if a physical open market sells electric iron for N8, 000 and Jumia sells the same for N8,000, because Jumia’s customer will be required to pay VAT (5% of cost), the price will jump to N8,400. This extra N400 for online purchase will inflate the price against the open market which typically does not collect VAT.  (In U.S., the reverse was the case: ecommerce firms were originally not required to collect taxes unlike physical stores even though the ecommerce companies expect customers to self-report during tax filing. The non collection of online taxes helped Amazon significantly when it started.) The Federal Inland Revenue Service (FIRS) says it will soon begin collection of Value Added Tax (VAT) on online transactions. The Chairman of the agency, Mr Babatunde Fowler, made the disclosure in an interview with Journalists in New York on Saturday. Fowler said: “soon, we will ask banks to impose VAT on online transactions for purchases of goods and services. “Not that it is something new; it actually should be in existence. “We will certainly follow up to make sure that every VAT that is due to be collected is collected.” He explained that the move was part of measures by FIRS to meet its N8 trillion revenue target for 2019. This program is going to be extremely challenging since government must ensure it is only commercial transactions that are charged VAT. Yes, it cannot effect VAT on online transactions like refund, loan payment, etc. Also, payments to foreign merchants may be excluded unless those foreign merchants are mandated to remit money to Nigeria. A good strategy will be to have regulations that any online commercial transaction must add VAT which will go direct to the bank. But if they make it that 5% will be deducted at source bank account after any online payment, chaos will be created. We will be watching how the government plans to roll out this online VAT collection in the nation. I expect a detailed publication in coming weeks that would define the rules for all the stakeholders.   Source: Tekedia

Members of the Depot and Petroleum Products Marketers Association of Nigeria, Major Oil Marketers Association of Nigeria and the Independent Petroleum Marketers Association of Nigeria on Thursday declared that the government and its agencies should not kill oil marketers’ businesses with multiple taxation. DAPPMAN, MOMAN and IPMAN made the call at a stakeholders’ meeting on compliance monitoring of the midstream and downstream oil sector organized by the National Oil Spill Detection and Response Agency in Abuja. Also at the event, the Director General, NOSDRA, Idris Musa, told the oil marketers that his agency was now set to monitor operations in the midstream and downstream oil sector, adding that it would further enforce stipulated regulations. “We have seen a lot of oil pollution from midstream and downstream operations and we want those operating in these arms of the sector to understand some of the activities we will be carrying out shortly, just as we’ve been doing with those in the upstream arm of the industry,” Musa stated. He added, “So NOSDRA will start sending officers to oil stations belonging to members of DAPPMAN, MOMAN and IPMAN to ensure that your underground storage tanks and other facilities are in compliance with our regulations in order to effectively mitigate the pollution of our ground water and other parts of the environment.” Responding to comments made by the NOSDRA boss, the Executive Secretary, DAPPMAN, Olufemi Adewole, stated that ironically executive members of the oil marketers’ associations were just coming from a meeting where the issue of multiple taxation on marketers was discussed. He said, “For this same business of ours, the Department of Petroleum Resources, Federal Ministry of Environment, state governments and their agencies, as well as many others come with various tax demands. With all these taxes, how can the marketer break even? “Our plea is that when taxing marketers, do it in a way that our businesses are not forced to close down. This is because right now oil marketers are closing shop on a monthly basis due to the high cost of operation and excessive taxation. This, of course, is not healthy for our economy and the nation.” Adewole noted that the landing cost of petrol was over N200 per liter and that the government was spending about N700 annually in subsiding the commodity, adding that this was too high for marketers, which was why they (marketers) stopped importing the commodity. He urged NOSDRA to work in synergy with the Federal Ministry of Environment and other similar agencies in states so as to reduce the multiple taxes levied on marketers. Both the Executive Secretary of MOMAN, Clement Isong, and the National Vice Chairman, IPMAN, Abubakar Maigandi, corroborated the position of Adewole and urged the agency and the government to approach the matter pragmatically if they wanted the pump price of petrol to remain within the reach of the masses. But in a quick response to their concerns, the NOSDRA boss explained that what his agency was looking at was not majorly about taxation or to levy oil marketers.   Source: Punch

The Osun State government has said that introduction of an automated technology known as “Omoluabi Card” for collection of taxes from taxable Osun residents was designed to boost the state’s revenue base. Supervisor for Finance Mr. Bola Oyebamiji, at a weekly meeting of the Ministry of Finance, said with the automated technology, all taxable adults in the state will be captured. He maintained that the new system would afford the Ministry of Finance to have an accurate data of every taxable resident and monitor the Internally Generated Revenue (IGR) drive of the state effortlessly. Oyebamiji, who is also the supervisor in charge of the Ministry of Commerce, Cooperatives and Industries, explained further that the new technology would help the state to get the required tax and levies from any taxable adult without any stress. He added: “Those who have paid their taxes will be seen at a glance and those who are yet to pay through the database, making it difficult for any official to embezzle such government fund.” He noted that most advanced countries are able to collect taxes from their citizens because of their efficient automated system. He said: “If we want to achieve new results, we need to stop doing things the old way. The idea of the ‘Omoluabi Card’, which we have been trying to implement, will go a long way in assisting the state in a lot of positive ways.   Source: Today

The Federal Inland Revenue Service (FIRS) has said it will spend N160 million to sew uniforms for its 850 drivers. Babatunde Fowler, chairman of the agency, disclosed this on Monday while defending their budget at the House of Representatives, noting that the uniforms are part of the efforts to make the drivers fit properly into the structure. The budget implies that the FIRS will be spending about N188,000 to sew each driver’s uniform. The service also budgeted N825 million for refreshment and N250 million for security vote. The committee had said the cost was outrageous but the FIRS chairman justified it, saying security vote, for instance, was meant to attend to some “security issues.” “The achievement of 2019 budget will be driven by increase oil and non-oil revenue tax collection,” he said. “The service in realization of this responsibility and challenges of doing manual collection will continue to implement automated tax collection for the critical sectors of the economy notably telecommunications, airlines and financial institutions. “The deployment of these platforms is at no cost to the service and the consultants will only be rewarded on increased revenue generation. “There will be increased enforcement activities nationwide to bring more tax payers into the tax net and increase compliance level.”   Source: General News

Minister of Finance, Mrs Zainab Ahmed: Nigeria’s tax to GDP ratio of 6.1 % believed to be rooted in corruption, says IMF The costs of corruption run deep. Your taxpayer dollars are lost in different ways, siphoned off from schools, roads, and hospitals to line the pockets of people up to no good, the International Monetary Fund said in a blog on Tuesday. Equally damaging is the way it corrodes the government’s ability to help grow the economy in a way that benefits all citizens. And no country is immune to corruption. According to an IMF Chart based on the Fiscal Monitor analyzes of more than 180 countries, more corrupt countries collect fewer taxes, as people pay bribes to avoid them, including through tax loopholes designed in exchange for kickbacks. Also, when taxpayers believe their governments are corrupt, they are more likely to evade paying taxes. The chart shows that overall, the least corrupt governments collect 4 percent of GDP more in tax revenues than countries at the same level of economic development with the highest levels of corruption. A few countries’ reforms generated even higher revenues. Georgia, for example, reduced corruption significantly and tax revenues more than doubled, rising by 13 percentage points of GDP between 2003 and 2008. Rwanda’s reforms to fight corruption since the mid-1990s bore fruit, and tax revenues increased by 6 percentage points of GDP. These are just two examples that demonstrate that political will to build strong and transparent institutions can turn the tide against corruption. The Fiscal Monitor shines a light on fiscal institutions and policies, like tax administration or procurement practices, and show how they can fight corruption. Nigeria’s tax to GDP ratio of 6.1 per cent is one of the lowest in Africa. The tax to GDP in Lesotho is 42.9%, in Ghana 20.8%, South Africa 26.9%, Kenya 18.4%. The costs of corruption run deep. Where there is political will, there is a way. Fighting corruption requires political will to create strong fiscal institutions that promote integrity and accountability throughout the public sector. Based on the research, here are some lessons for countries to help them build effective institutions that curb vulnerabilities to corruption: Invest in high levels of transparency and independent external scrutiny. This allows audit agencies and the public at large to provide effective oversight. For example, Colombia, Costa Rica, and Paraguay are using an online platform that allows citizens to monitor the physical and financial progress of investment projects. Norway has developed a high standard of transparency to manage its natural resources. Our analysis also shows that a free press enhances the benefits of fiscal transparency. In Brazil, the results of audits impacted the reelection prospects of officials suspected of misuse of public money, but the impact was greater in areas with local radio stations. Reform institutions. The chances for success are greater when countries design reforms to tackle corruption from all angles. For example, reforms to tax administration will have a greater payoff if tax laws are simpler and they reduce officials’ scope for discretion. To help countries, the IMF has built comprehensive diagnostics on the quality of fiscal institutions, including public investment management, revenue administration, and fiscal transparency. Build a professional civil service. Transparent, merit-based hiring and pay reduce the opportunities for corruption. The heads of agencies, ministries, and public enterprises must promote ethical behavior by setting a clear tone at the top. Keep pace with new challenges as technology and opportunities for wrongdoing evolve. Focus on areas of higher risk—such as procurement, revenue administration, and management of natural resources—as well as effective internal controls. In Chile and Korea, for example, electronic procurement systems have been powerful tools to curtail corruption by promoting transparency and improving competition. More cooperation to fight corruption. Countries can also join efforts to make it harder for corruption to cross borders. For example, more than 40 countries have already made it a crime for their companies to pay bribes to gain business abroad under the OECD anti-corruption convention. Countries can also aggressively pursue anti–money laundering activities and reduce transnational opportunities to hide corrupt money in opaque financial centers. Curbing corruption is a challenge that requires persevering on many fronts, but one that pays huge dividends. It starts with political will, continuously strengthening institutions to promote integrity and accountability, and global cooperation.   Source: PM News

The Federal Government says it will grant tax incentives to private companies willing to fund the construction of major road projects in the six geo-political zones of the country. The Minister of Finance, Mrs Zainab Ahmed said this on Tuesday at the Public Presentation of the Approved 2019 Budget in Abuja. Ahmed, who spoke on some of the government’s Public Private Partnership initiatives, said any company who funds road construction will get tax credit or reduction equal to the amount invested in the projects. “The current government has undertaken several initiatives to partner with the public. “One of them is the Road Infrastructure Tax Credit Scheme, where if any private sector build any road with their own resources, they can recover the investment made through tax credit. “Also, the federal government is automating the process of acquiring waivers or import duties. Right now, the process is extremely cumbersome and has proven to be a drain on our resources. “We have just advanced process for the project and we believe that once it’s automated, the process will be more transparent and efficient,’’ she said. Ahmed also said that the Federal Government had introduced the Strategic Revenue Growth Initiative for sustainable revenue generation in all sectors of the economy. She said the initiative also seeks to improve monitoring collections by all revenue generation agencies. Meanwhile, the 2019 Budget Breakdown shows that the Ministry of Interior has the highest recurrent allocation of N564.22 billion, which covers salaries, overheads and other running costs in the Ministry. President Muhammadu Buhari had on Monday signed the 2019 appropriation bill into law, signaling beginning of the implementation of the 2019 fiscal calendar. The Statutory Transfer stood at N502 billion, Fiscal Deficit, N1.92 trillion, Special Intervention N500 billion, Recurrent Expenditure N4.07 trillion, Capital Expenditure, N2.09 trillion and Deficit to Gross Domestic Product (GDP) of 1.37 per cent. The non-oil revenue is estimated at N3.31 trillion while the oil revenue is estimated at N3.69 trillion. (NAN)   Source: Daily trust