The Federal Inland Revenue Service, FIRS, on Monday accused Ministries, Departments and Agencies, MDAs, of abusing stipulated tax laws in their contract award processes.
The Acting Chairman of FIRS, Kabir Mashi, said at a stakeholders’ forum in Abuja that most of the MDAs engage in illegal acts in circumvention of laid down tax regulations, particularly as they relate to Tax Clearance Certificates, TCCs, by business owners and other taxpayers.
Mr. Mashi, who said the Forum was organized to enlighten taxpayers on their obligations and sundry initiatives to improve tax administration in the country, urged the citizens to ensure that they obtain their tax certificates from its offices across the country.
According to Mr. Mashi, even when the agency has strengthened its engagements with the MDAs on tax compliance drive, some agencies still engage in illegal activities to subvert tax laws.
He urged the MDAs and taxpayers to ensure total compliance with the tax laws by obtaining their Tax Identification Numbers, TIN, to identify as tax payers and confirmation of tax remittances.
“Let me appeal to MDAs and taxpayers that there is need for you to ensure that any person you give contracts or you are patronizing, have TIN,” the FIRS Chairman said. “We are collaborating with the Nigerian Customs Service (NCS) to ensure that without TIN, the MDAs cannot conduct any business in the country. It is vital. It is key for taxpayers to get their TIN.”
Mr. Mashi said the FIRS was losing huge revenue through MDAs that award contracts to companies without TIN, pointing out that deductions made for withholding tax (WHT) or value added tax (VAT) and remitted through the banks are often not transferred to FIRS.
Emphasizing the importance of businesses and individuals to obtain their TIN, issued by the FIRS free of charge, Mr. Mashi urged tax payers to comply with the requirements on their annual filings as well as obtaining the TCC through official channels for their employees.
He warned taxpayers to ensure that they obtain their TCC, which he said is compulsory if they must transact businesses, pointing out that the FIRS has lots of ways of identifying fake tax certificates.
“If anyone is found with fake TCC, the person risks being prosecuted,” Mr. Mashi warned.
On the efforts by the MDAs to collaborate with the FIRS on verification of TCCs during the process of awarding of contracts, Mr. Mashi said the Forum, was designed to enhance the FIRS technical and human resource capabilities towards improved non-oil revenue collection.
To enhance FIRS’ tax revenue generation capacity, the acting Chairman said the service is now focusing on improving its non-oil tax revenues, which required the collaboration and cooperation of all stakeholders, particularly the MDAs.
Mr. Mashi, who spoke on the tax reform initiatives undertaken by the revenue agency’s management over the past years, identified eight key initiatives as platforms for achieving the goals of improved tax system efficiency and revenue generation.
These include audits, arrears and debt enforcement, review of tax exemptions, evasion of rental taxes, taxation of high net worth transactions, registration, filing and communication as a means of enhancing compliance.
Describing the Forum as part of the agency’s communication strategies, Mr. Mashi said it provides a more visible and high level platform for the FIRS to exchange ideas and obtain feedback on their operations.
On the importance of the Capacity Enhancement Programme, CEP, to the tax reform agenda, the FIRS boss explained that it was designed as a specific intervention activity to boost FIRS capacity to collaborate with other stakeholders to grow the Nigerian economy into one of the largest in the world.
Mr. Mashi acknowledged more work still needs to be done in various areas of the economy, including the tax system, to improve the major indices of growth, such as ratio of oil to non-oil tax revenue collection as well as tax to GDP ratio.
The Accountant General of the Federation, Jonah Otunla, urged the FIRS to do more to help reduce the nation’s the tax to GDP ratio, which, he said was now one of the lowest following the recent rebasing of the country’s GDP among world’s emerging economies.
Mr. Otunla expressed optimism that the ongoing implementation of the Government Integrated Financial and Management Information System, GIMFIS, would help address some of the challenges of revenue collection in the public sector.
The AGF said GIMFIS would now be used in capturing transactions in MDAs, including payments, urging the FIRS to utilise the interface with the financial systems of MDAs on the platform as a strategic option of enhancing the Service’s revenue collection.
“We are concerned that a large number of taxpayers lack proper understanding of the vital role FIRS plays in national development.
Therefore, our obligations as taxpayers is to support FIRS in the effective discharge of its mandate of collection and accounting for all tax revenue,” the AGF said.
“This forum therefore provides an opportunity for us to obtain a better understanding of what FIRS is doing and what is expected of the taxpayers. I therefore urge you to support the efforts of the government to leverage on the tax system as a platform form for sustainable economic development,” he said.