FIRS Bars Consultants From Collecting Taxes For FG

Babatunde Fowler, acting chairman, FIRS

The new acting chairman of the Federal Inland Revenue Service (FIRS), Mr Babatunde Fowler, has barred tax consultants from assessing and collecting tax revenue on behalf of the federal government. The FIRS boss, who announced this yesterday in Abuja when he met with members of the Joint Tax Board (JTB), said that, henceforth, consultants will be engaged by the FIRS to gather data only.

Fowler said the FIRS had about “1,000 staff in audit function, so you can imagine 1,000 members of staff trying to review or audit the books of 450,000 companies; it just won’t work. To improve the levels of transparency and accountability, these consultants will only gather data. The law does not allow them to do assessment or collect revenue on behalf of government. They are just to assist our staff to collect data.”

He said the FIRS would do the assessment with the States’ Board of Internal Revenue and issue the demand notices for the taxes due.

The report continues:

Some state members of the JTB had complained that “many consultants come to make huge claims so that they can get huge commissions, but they don’t have the capacity to actually collect the huge revenue they claim to have collected in some states.”

On recent calls for an upward review of the Value Added Tax (VAT) collected by the federal government, Fowler noted that “it is the responsibility of the federal government and the federal ministry of finance to decide whether that (VAT) will change.”

Fowler agreed that five per cent VAT charge was low “when you consider other countries who charge VAT both in West Africa and in Europe, but those other countries have reached what I will call the maximum level when it comes to paying taxes or public tax. Those countries have 99 per cent tax compliance, so I think we should first of all get there before we consider increasing VAT. When everyone is paying their taxes, then we can look elsewhere.”

In order to build on the achievements of his predecessors, Fowler said he would reach out to States’ Board of Internal Revenue for collaboration.

“There are many stones left unturned as far as our current tax administration processes are concerned. For example, it is common knowledge that the administration of VAT is greatly hindered by many factors, ranging from inadequate coverage of VAT-able persons to non-remittances of VAT deductions. Tax revenue loss in this aspect can only be imagined,” he said.

Speaking to journalists on how the FIRS will operate under his watch, Fowler said he would introduce fresh strategies.

“Our objective is to have 99.9 per cent level of compliance, meaning that everyone and corporate entities that are taxable are captured in the tax net and pay the appropriate tax.”

The FIRS, he said, will “exchange information with states’ boards of internal revenue so that we have all the information on their own data base.

“We’ve given them ours already, meaning that if there is any company that they don’t have in their data base, they can capture such company. So, immediately, we will have a growth in the number of tax payers at both the federal and state levels within one week.”

He noted that, as tax administrators, the federal and state tax bodies were deficient in terms of collaboration and cooperation in the areas of exchange of information for tax purposes.

The FIRS chairman urged them to “to identify and locate taxpayers through sharing and exchange of information as much as possible; conduct joint audit exercises by FIRS and SBIRs; carry out joint tax enlightenment and enforcement exercises; share and exchange information concerning unremitted taxes identified by either side; embark on joint training programmes and workshops and strengthen collaboration on areas of review and amendments of tax laws and legislations from time to time.”

The FIRS Chairman was cautious on the volume of revenue that will be generated by the FIRS.

Fowler stated: “In terms of percentages and the information given by FIRS, they did say that they have 450,000 corporate organizations out of which one-third was paying. We intend to make sure that 99.9 per cent pays taxes due.

“In terms of what figure that will be, I don’t know, but if we are to assume that they are medium to small scale companies. Maybe we can begin to say 50 per cent growth within the next 12 months.”

Fowler also disclosed that the collation and analysis of Internally Generated Revenue (IGR) of states from 2010 to 2014 was being carried out.

The importance of this exercise, he said, is that “it would enable us compute non-oil revenue ratio/GDP. As at Thursday, September 10, 2015, we have received IGR figures up to December 2014 from all the states.”

Fowler also revealed that efforts by the JTB secretariat in monitoring Pay As You Earn (PAYE) payments at the Nigeria Electricity Liability Management Commission was beginning to yield results “as more states are being listed for payment as soon as funds are released for the purpose.”

The commission, he said, is also considering instalment payments to the states on the outstanding list.

“Enugu State just benefited from this arrangement by receiving half payment of its total entitlements from NELMCO. Sometimes we give taxpayers that opportunity to make instalment payments, especially when it is a government agency, because a government agency is run through budget and, of course, you have to have cash to back up those payments,” he said.

To avoid multiple taxation, Fowler called on all Nigerians “not sure of what taxes to pay, to stop at any state board of internal revenue office or any FIRS office all across Nigeria for clarification. It is time for companies to start paying correct taxes. Differences in figures between states and FIRS will soon be done away with.”