New measures would ensure optimal revenue yield
The Federal Inland Revenue Service, FIRS, on Thursday rolled out a new system that would ensure appropriate taxation of multinational firms and enterprises operating in the country.
The Acting Executive Chairman of FIRS, Kabir Mashi, said at the opening of a stakeholders’ forum on “Filing of Transfer Pricing, TP Returns” in Lagos that this was part of efforts to ensure optimal revenue yield.
Mr. Mashi said transfer pricing system was generally about setting appropriate prices for goods, services, asset, intellectual properties, loans, guarantees supplied or transferred by one enterprise to another members of the same group or otherwise connected.
Represented by the Coordinating Director, Direct Report Group, DRG, Queensley Seghosime, Mr. Mashi said the regime would also help to fight tax evasion embedded in “under-pricing” of controlled transactions between associated enterprises. He said that transfer pricing would reduce the issues associated with double taxation, provide taxable persons with certainty and a level playing field between multinational enterprises and independent enterprises doing business in Nigeria.
The acting Chairman noted that the programme was meant to expose the various guidelines, forms and documents that would be used to file the TP returns in line with the its regulations as well as the relevant tax laws. He said that Nigeria adopted the regulations and commenced implementation on transfer pricing in order to address the problem associated with shifting profit among enterprises.
“These are laudable objectives, but it would not by itself translate to a success story unless the regime is properly implemented,” he said.
He stressed the need for all businesses to play by the rules, pointing out that the new regime of transfer pricing in Nigeria could reposition the country to a path of sustainable economic growth and rapid development.
The FIRS, he noted, had always yearned for the transparent, efficient and effective implementation of the transfer pricing regime to promote voluntary compliance as enshrined in the Service’s mission statement.
While soliciting the cooperation of all stakeholders to make the implementation of the TP regime a success, he emphasized the voluntary compliance with the provisions of the TP regulations and other extant tax laws.
Coordinating Director, Field Operations Group, FOG, Ajayi Bamidele, said the Service had resolved to make transfer pricing a success through the establishment of Transfer Pricing Division, TPD in FIRS Lagos office to drive the processes.
He said the launch of the new taxation regime was the fulfillment of part of its pledge to do the business of tax administration in partnership with the taxpayers. He said that the new tax regime would soon be rolled out in Abuja and Port Harcourt to achieve a good spread.
During the event, presentations were made on different aspects of the new regime, including transfer pricing Declaration Form and Disclosure Form.