Tax preparation services

The Institute of Chartered Accountants of Nigeria has called on the Federal Government to address some of the gaps identified in the implementation of the ease of doing business reforms. Specifically, it called on the Federal Inland Revenue Service to address the challenges being experienced in its technology infrastructure to make it easier for taxpayers to process tax clearance certificate. The Chairman of ICAN Abuja Chapter, Mr Oluwafunminiyin Akande, said these in Abuja at a seminar on ease of doing business.. He said while the service had made some progress over the years in simplifying the process of tax payment, there are some identified gaps that had yet to be addressed. He said that the electronic filing system of the service needed to be worked on to cushion the impact of system failure which it had recorded within the last few weeks. Akande said that between January and the end of February, the FIRS e-filing and electronic delivery platforms were completely shut down. The development, according to him, made it difficult for tax practitioners to conduct tax related businesses with the service. He said, “Government has been saying so many things about making the environment to be friendly but we the practitioners know that we haven’t got there yet. “The policymakers and practitioners must meet regularly to discuss the areas that are not working yet. If we don’t give them the feedback, they won’t know how to improve. That is the reason why we are organizing this programme. “We have identified so many gaps. For instance, the FIRS has been talking about e-filing, electronic delivery and others but you discovered that it hasn’t been fully achieved. “From January till the end of February, their network was completely shut down. This means that as tax practitioners, you cannot process tax clearance and e-filing for your clients. “Meanwhile, there are penalties attached to some of these things. Apart from what it costs you, there is needed to be going there every day because you don’t know the time the network will be working. “How can you shut down your system for two months? Can such thing happen in a bank? So, until we start thinking in that way, the government agencies will not improve. “So if we don’t tell them, they won’t know how we feel. That is one of the gaps.” He also said the time it takes the FIRS to process Tax Identification Number and Tax Clearance Certificate needed to be reduced as it was currently taking the service longer than even the approved period to process them. He said, “They will also tell you that tax clearance certificate can be obtained within 14 days but it doesn’t work. You will get there to collect Tax Identification Number which ordinarily should be given to you on the spot but they will tell you to come back, and when you return, they will tell you network is not working.”   Source: Punch

The Federal Inland Revenue Service (FIRS) has taken its tax drive and enlightenment services to the 30th Enugu International Trade Fair, our correspondent reports. An Assistant Director of FIRS. Mrs Beatrice Obi told our correspondent that they were taking advantage of the event to sensitize participants on the need to discharge their civic duties. Obi said that the platform was a veritable avenue to interface with private and corporate organizations and enterprises. She said that they also offered advice on the modalities for the registration of companies, adding that those finding it difficult to register their companies would receive useful information. The assistant director, Federal Engagement and Enlightenment Tax Team, said that though the FIRS also had the mandate to enforce tax payment, “we are not here for enforcement”. Obi said it was sad that the turnout of people for tax education had not been encouraging due to the limited number of exhibitors at the fair.   Source: News verge

The Senate, Wednesday resolved to override President Muhammadu Buhari’s veto on the constitution of the Federal Republic of Nigeria, 1999 (fourth Alteration, No.28) Bill, 2018 and Industrial Development (Income Tax Relief) Amendment Bill, 2018 respectively. This development followed the recommendations by Senate Technical Committee on Declined Assents to Bills By Mr. President and Commander-in-Chief of the Armed Forces of the Federation chaired by Senator David Umaru. The, bill, however, seeks to provide for the first time within which the President or Governor shall lay the appropriation bill before the National Assembly or House of Assembly, to encourage early presentation and passage of Appropriation Bills. It would be recalled that Buhari declined assent to the bill, saying section 2(b) and section 3(b) of this bill appear not to take full cognisance of the provisions of section 58(4) of the 1999 constitution. But the hallowed chamber took exemptions to Buhari’s ground for declining his assent wherein he cited section 58(4) of the 1999 constitution. The committee said, “For clarity, section 58(4) deals with mode of exercising federal legislative powers: general, particularly, the number of days to assent or decline assent to a bill. “It provides – “Wherein a bill is presented to the President for assent, he shall within thirty days thereof signify that he assents or that he withholds assent”. The 7-man committee, therefore, explained that the bill in essence seeks to make it mandatory for Mr. President and Governor of a state to cause to be prepared and laid before parliament, estimates of the revenues and expenditure of the federation for the next following year. The bill, according to the Senate committee, would also make the parliament to pass the appropriation bill before the commencement of the next financial year. The committee added, “The legislative intent behind this bill is to ensure that we run a normal financial year”. For the Income Tax Relief amendment bill, it seeks to allow companies that expand their operations in pioneer industry or product to apply for a new pioneer status. But Buhari declined assent to the bill on the following grounds: “That there are ongoing consultation by the Federal Ministry of Industry, Trade and Investment with other Ministries, Departments and Agencies (MDAs) on the tax holidays incentive regime for expansion projects, Investments in rural areas, as well as for Agriculture/Agro-processing to be concluded and pave way for presidential orders, or executive Bill’s for consideration and passage by the National Assembly. “That the consultations would result in fiscal measures that would greatly enrich the quality of the tax holidays incentive regime for these types of projects and investments. “That at the end, thaes fiscal measures when finalized, would be subsequently submitted to the National Assembly by way of presidential Executive orders, or executive Bill’s for consideration and passage into law by the federal legislature, in due course”. However, the Senate committee in reaction said, ” Mr. President, Distinguished colleagues, we wish to state here that the committee finds Mr. President’s observation on this bill rather simplistic. “Certainly, Mr. President’s overall intention to come up with legislative proposal that would stand the test of time, is commendable. “However, law-making cannot unjustly suffer in anticipation of a proposed legislation. “Above all, nothing stops Mr. President or anybody for that matter from proposing an amendment to an existing law or even a repeal of an existing law. “There is nowhere in the world where the President can propose to stop the law-making process by an executive fiat or order. “The President cannot withhold assent to a bill on the mere fact that consultations are on-going, which will enable him come up with a new bill”.   Source; Dailypost

The Senate has asked the Federal Government to consider increasing taxes on luxury goods and services to boost revenues. The Senate Committee on Finance made the recommendation on Tuesday during a plenary session. The committee also urged relevant agencies to continue exploring ways of generating additional revenues to reduce the government’s fiscal deficit. It said, “The Federal Government should harness the full optimal potential of the Federal Ministry of Mines and Steel Development in terms of revenue generation to minimize the level of borrowing. “The Federal Government should consider reducing the granting waivers and exemptions while ensuring that the Nigerian Customs Service personnel are at all oil terminals for accountability and the Federal Inland Revenue Service should consider increasing tax on luxury goods and services.” The committee said the 20 per cent operating surplus to be remitted by government-owned enterprises should be deducted at source. The Federal Government has been trying to raise revenues in the face of lower oil prices after the country recovered from a recession that slashed public finances, weakened its currency and cut spending on capital projects. The country, which has one of the lowest tax rates on the African continent, relies on crude oil sales for much of government revenues. In the past, the government had mulled the idea of raising taxes on luxury goods to 15 per cent from the current rate of five per cent, to boost its tax to GDP ratio to 15 per cent from six per cent between 2017 and 2020.   Source: Punch

The Federal Inland Revenue Service on Monday announced plans to automate collection of Value Added Tax from operators in the nation’s lottery and gaming industry. The Chairman, FIRS, Mr Babatunde Fowler, disclosed this in Lagos at a stakeholders’ meeting organised in conjunction with the National Lottery Regulatory Commission with lottery and gaming operators. He said in his welcome address that the automation would enable lottery players and bettors to pay VAT on each transaction made. “What we are trying to introduce today is aimed at improving the transparency, accountability and convenience in the payment of any taxes. We are automating tax collection in across various industries in the country,” he added The Director-General, NLRC, Mr Lanre Gbajabiamila, said the importance of strict adherence to tax laws could not be over-emphasised in view of Nigeria’s present economic challenges. “In the gaming industry, products and services are generally offered through agents who are commonly in direct contact with the players. The consumption of the products and services are taxable under the law,” he said. Industry operators, however, voiced concerns over the VAT on lottery and gaming services, saying it would hurt their businesses. The founder of NairaBET, Mr Akin Alabi, who spoke on behalf of lottery and gaming operators, faulted the mode of charging the VAT, saying it would drive customers away from operators’ platforms. He said, “There must be another mode of collecting VAT rather than from the top level, which is on every stake. Telling operators to pay from the stakes is almost impossible because what it means is that customers will leave our platforms. So, they will start looking for companies that are not regulated where they can place their bets; they will look for foreign companies. So, it is going to ruin our business. “Presently, I have little to lose. I am in the process of divesting all my interests in NairaBET because I just won election to the House of Representatives. But I don’t want to leave the industry in a mess; that is why I am passionate about it.” Alabi stated that the FIRS should have consulted operators before taking the decision to impose VAT and automate its collection. Responding, the FIRS boss, said, “Tax has to do with law and the law says that for every transaction that is VATable, five per cent should be charged. You have to be aware that we are automating collection in all industries. This is not a tax on the business, but on the bettors. “If you carry out foreign bets and you go through your banks to make the payment, you will also be charged VAT.” Fowler, while fielding questions from journalists on the sidelines of the event, said, “If somebody comes to bet N100, it becomes N105. I can assure you that it will not make them change their minds.”   Source: Punch

The Kaduna Refining and Petrochemical Company, one of the country’s crude oil refineries that is run by the Nigerian National Petroleum Corporation (NNPC), is one of the highest tax payers to the government of Kaduna State, Mr. Nasir el-Rufai, the state governor has said. According to el-Rufai, the refinery which capacity utilization remained at zero for most parts of the months in 2018, and was not refining crude oil despite receiving the commodity from its parent body, the NNPC, pays the state its taxes regularly. The governor in a statement from the NNPC yesterday in Abuja disclosed this to the corporation’s Group Managing Director, Dr. Maikanti Baru, during a courtesy call on him, he however did not disclose the type of tax the unprofitable refinery pays to the state. The NNPC’s monthly operations and financial report for December 2018, indicated that besides a profit of N2.957.33 billion recorded by the Kaduna Refinery in April 2018, all other months, it made losses. Notwithstanding, el-Rufai, said it paid its taxes promptly. He was also quoted to have stated in the statement signed by NNPC’s Group General Manager Public Affairs Division, Mr. Ndu Ughamadu, that the state would support the NNPC to build its Abuja-Kaduna-Kano (AKK) gas pipeline project. The governor described the AKK gas line project as a very important one to Kaduna, noting that the people of Kaduna were happy it would support the state’s power demands.   Source: bizwatchnigeria