… bill set for second reading
An executive bill that will scrap the Federal Inland Revenue Service (FIRS) and replace it with the Nigeria Revenue Service that will be responsible for the collection and administration of all government revenue is currently being considered by the House of Representatives.
The bill which is one of the four executive bills presented to the House recently by the President is titled “an act to repeal the Federal Inland Revenue Service (establishment) act, no 13, 2007 and enact the Nigeria Revenue Service, charged with powers of assessment, collection of, and accounting for revenue accruable to the government of the Federation, and related matter” gazetted by the House as HB 1757.
The bill is aimed at providing a legal, institutional and regulatory framework for the administration of taxes and revenue under the various laws in the country and to account for such taxes and revenue collected.
The proposed law vest on the service the power to administer Nigeria Tax Act, 2024, Nigeria Tax Administration Act, 2024 and Laws imposing collection of taxes, fees and levies collected by other Government entities including signature bonus, pipeline fees, penalty for gas flared, depot levies and licences, fees for Oil Exploration Licence (OEL), Oil Mining Licence (OML), Oil Production Licence (OPL), royalties, rents (productive and non-productive), fees for licences to operate drilling rigs, fees for oil pipeline licences, haulage fees and all such fees prevalent in the oil industry but not limited to the above listed.
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The new law grant the service the power to assess persons including corporations, companies, partnerships, enterprises and individuals chargeable with tax and collect or recover tax assessed, enforce payment of taxes and remit tax collected, under the provisions of this Act or any other law, into designated accounts.
The new body to be created will also be responsible by or accounting for all revenue accruing to the Government, while working in collaboration with the relevant Ministries and Agencies of Government to review the tax regimes and promote the use of taxation to develop, stimulate and grow economic activities.
In addition, it is expected to arry out examination and investigation exercises with a view to enforcing compliance with the provisions of this Act, and any other tax law; make a determination of the extent of financial loss and such other losses by Government arising from tax fraud or evasion, and revenue foregone arising from tax waivers and other related matters.
It will also have powers to adopt measures to identify, trace, freeze, confiscate or seize proceeds derived from tax fraud or evasion; adopt measures which include compliance and regulatory actions, introduction and maintenance of investigative and control techniques on the detection and prevention of non-compliance with tax laws.
It will also establish and maintain a system for monitoring international dynamics of taxation in order to identify suspicious transactions, and the perpetrators or other persons involved, while providing and maintaining access to up-to-date and adequate data and information on all taxable persons, individuals, corporate bodies or all agencies of government involved in the collection of revenue for the purpose of efficient, effective and correct tax administration and to prevent tax evasion or fraud.
The Nigeria Revenue Service is also to maintain database, statistics, records and reports on persons, organisations, proceeds, properties, documents or other items or assets relating to tax administration including matters relating to tax waivers, fraud or evasion;
In addition, it will liaise with the office of the Attorney-General of the Federation, any Government security and law enforcement agency, and such other financial supervisory institutions in the enforcement and eradication of tax related offences.
It will have the power to implement an agreement or arrangement between the Government of Nigeria and the Government of another country to avoid double taxation while also providing administrative assistance in tax matters contains in an obligation for the collection of revenue claim due to the Government of that country or any other administrative assistance on tax, the Service shall carry out such obligation as may be prescribed in that agreement or arrangement.
The law states: “The Service may enter into agreement with the competent authority of a country with which the Government of Nigeria entered into an agreement or arrangement for the avoidance of double taxation or administrative assistance in tax matters to prescribe the manner of the performance of the administrative assistance obligation contained in that agreement or arrangement.”
It mandates the Accountant-General of the Federation shall open a designated account into which revenue claims collected by the Service on behalf of the Government of any other country shall be paid pending the remittance of the amount so collected to that country.
It also mandate the Service to take any interim measure, including any judicial measure, in line with the provisions of this Act or other relevant laws to preserve the collection of any revenue claim for which assistance has been requested under this section.
It said: “Without prejudice to the provisions of any other Act concerning data privacy or data protection, institutional information or communication, all internal information, communications, documents or memoranda of the Service are confidential.”
It imposes a fine of N5 million or a three year jail term or both on anybody who discloses or attempts to disclose institutional information, communication, document or memorandum of the Service while insisting that those acting in an official capacity or employed in the administration of the Act shall regard and deal with originals or copies of all documents, information, returns, notices or assessment, lists relating to the business, assets, liabilities, profits or items of profits of any person as secret and confidential.
It also said: “A person acting in an official capacity or employed in the administration of this Act who, being in possession of or control of, originals or copies of any document, information, return, notice or assessment, list relating to business, assets, liabilities, profits or items of profits of any person, communicates or attempts to communicate such information or anything contained in the document, return, notice or assessment, list or copy to any person other than-(a) a person authorised by the Service to communicate it;(b) by an order of the court; or for the purpose of this Act or any other tax law in Nigeria, commits an offence under this Act is liable on conviction to a fine not exceeding N5 million or to imprisonment for a term not exceeding three years or to both fine and imprisonment.
“A person appointed or employed under this Act shall not be required to produce any document, information, return, notice or assessment, or to divulge or communicate any information that comes into his possession in the performance of his duties except as may be necessary in order to institute a legal proceeding or in the course of a legal proceeding relating to tax in Nigeria.
“The obligation as to secrecy imposed by this Act shall not prevent the disclosure of relevant information to an authorised officer of the government of a country with which Nigeria has entered into any treaty, agreement or arrangement on tax matters.
“A notice, summons or other document required or authorised to be served on the Service under the provisions of this Act or any other law may be served by delivering it to the Executive Chairman, sending it by registered post or courier service addressed to the Executive Chairman at the principal office of the Service, delivered to a designated e-mail address of the Service, or other electronic means as may be provided by the Service.
“The Accountant-General of the Federation shall, not later than 30 days of receiving a warrant endorsed by the Executive Chairman of the Service and approved by a Judicial Officer in accordance with the Third Schedule to this Act, deduct un-remitted revenue due from any Ministry, Department, Agency or Government from its budgetary allocation or such other money accruing to it, and shall remit the deductions to the Service.
It added:”Any other law for the assessment, collection and accounting of revenue accruable to the government of the federation as may be made by the National Assembly from time to time or regulation incidental to those laws, conferring any power, duty and obligation on the Service, or where no administrative provisions have been made for such tax, duty or levy.”