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Tag: FIRS

  • VAT designed to support the poor, says Fowler

    The Federal Inland Revenue Service (FIRS) yesterday explained that Value Added Tax (VAT) is a consumption tax primarily designed to support poor people, and not to create hardship for them.

    Its Executive Chairman, Babatunde Fowler allayed fears that the increase in VAT may cause hardship for the poor, stating that VAT is charged on consumption and capacity to consume.

    He said:  “When you don’t consume certain categories of goods and services, you are not liable to pay VAT charges on those items. VAT is not charged on all medical and pharmaceutical products. It is not charged on basic food items. It is not charged on books and educational materials. It is not charged on baby products, fertilizers, locally produced agricultural and veterinary medicine. VAT is not charged on farming machinery and farming transportation equipment.

    “VAT is not charged on all exports, plant machinery and goods imported for use in Export Processing Zones and free trade zone: Provided that 100 per cent production of such company is for export.

    “Other services exempted from VAT are medical services, services rendered by Community Banks, People’s Bank and Mortgage Institutions, plays and performances conducted by educational institutions as part of learning and all exported services are exempted from VAT.

    Fowler said some people misunderstood what VAT is. VAT is a consumption tax. If you don’t have money to purchase certain categories of goods and services and you don’t consume them, then VAT is not your problem.  “VAT is used to assist the needy.

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    VAT provides support for the needy, not a hardship on them; 85 per cent of VAT collected is shared among states for them to provide free education, free health services, provide basic amenities among others.

    “We can see what the Federal Government is doing with the tax money. Look at the rail system, the Abuja-Kaduna rail is complete.  Look at the Lagos-Ibadan expressway, look at the education system, the school feeding programme among others. If at the state level, your government cannot justify the taxes you pay to them, you have the right to vote them out in the next four years,” Fowler said, according to a statement from FIRS.

    Fowler said if countries such as United Arab Emirate (UAE), Saudi Arabia which are rich in oil resources would be laying emphasis on taxation, Nigeria should also emulate them.

    The FIRS Chairman also explained that Nigeria’s economy is only picking up in recent times because former administrations over-looked tax reforms and depended on the depletable mineral resources.

     

  • VAT designed to support the poor, says Fowler

    The Federal Inland Revenue Service (FIRS) has stated the Value Added Tax (VAT) is a consumption tax primarily designed to support poor people, and not to create hardship for them.

    Executive Chairman of the FIRS Babatunde Fowler allayed fears that the increase in VAT may cause hardship for the poor, stating that VAT is charged on consumption and capacity to consume.

    A statement by the Service on Tuesday quoted the FIRS Chairman as saying: “When you don’t consume certain categories of goods and services, you are not liable to pay VAT charges on those items.

    “VAT is not charged on all medical and pharmaceutical products. It is not charged on basic food items.

    “It is not charged on books and educational materials. It is not charged on baby products, fertilizers, locally produced agricultural and veterinary medicine.

    “VAT is not charged on farming machinery and farming transportation equipment.

    “VAT is not charged on all exports, plant machinery and goods imported for use in Export Processing Zones and free trade zone: Provided that 100 percent production of such company is for export.

    “Other services exempted from VAT are Medical services, Services rendered by Community Banks, People’s Bank and Mortgage Institutions, plays and performances conducted by Educational Institutions as part of learning and all exported services are exempted from VAT.”

    Fowler said he understands “that some people misunderstand what the VAT is. VAT is a consumption tax.

    “If you don’t have money to purchase certain categories of goods and services and you don’t consume them, then VAT is not your problem.

    “The VAT is used to assist the needy. VAT provides support for the needy, not a hardship on them.

    “85 percent of VAT collected is shared among states for them to provide free education, free health services, provide basic amenities among others.

    “We can see what the Federal Government is doing with the tax money. Look at the rail system, the Abuja-Kaduna rail is complete.

    “Look at the Lagos-Ibadan expressway, look at the education system, the school feeding program among others.

    “If at the state level, your government cannot justify the taxes you pay to them, you have the right to vote them out in the next four years,” Fowler said.

    Fowler said that if countries like United Arab Emirate (UAE), Saudi Arabia who are rich in oil resources would be laying emphasis on taxation, Nigeria should also emulate them.

  • FIRS denies report on VAT increase

    The Federal Inland Revenue Service (FIRS) yesterday denied reports that the Service was advocating a 50% increase in Value Added Tax (VAT) .

    A statement issued by the service  said “Tunde Fowler, the Executive Chairman, Federal Inland Revenue Service, (FIRS) on Tuesday called for an increase in the number of Nigerians and companies paying VAT and not a 50 per cent increase in VAT rate.”

    The statement went on to add that “contrary to reports in the media, the FIRS Executive Chairman called for a reduction in Companies Income Tax (CIT) rate for small businesses so as to improve compliance.”

    “Though he indicated that there should be an increase in VAT rate by the end of the year, he NEVER, for once suggested a 50 per cent hike of any percentage increase at all. Rather, he promised improved collection in CIT, Petroleum Profits Tax, (PPT) and VAT in 2019 relative to the collection performance of the Service in 2018.”

    In 2018, FIRS collected the sum of N1.1 trillion in VAT N1.42 trillion in Companies Income Tax (CIT) and N2.4 trillion in Petroleum Profits Tax (PPT).

    Immediately the news broke that the FIRS had told the Senate committee that it planned to increase VAT by 50% to help fund the N30,000 minimum wage for workers, many Nigerians expressed concerns over the appropriateness of the proposed VAT increase.

  • FIRS gets N23b unpaid tax from corporate firms

    The Federal Inland Revenue Service (FIRS) has generated over N23billion in unpaid taxes from the recently suspended substitution exercise on corporate bank accounts, marked by the imposition of restriction on the accounts of tax-defaulting organisations.

    FIRS Chairman, Babatunde Fowler, who spoke in Lagos yesterday at the Manufacturers Association of Nigeria (MAN) Interactive Forum on Tax Matters as guest speaker, said the focus of exercise was 3,000 frims deducting Value Added Tax (VAT) and Withholding Tax (WHT) on behalf of the Federal Government without remitting such.

    The companies, he said, had no tax identification and therefore could not remit the deducted taxes to government, making them treat such deductions as part of their cash flow.

    Fowler stated that the suspension of the exercise for 30 days, announced last weekend, was occasioned by the deluge of corporate taxpayers visiting FIRS offices to regularise their tax affairs and make payments, a situation that stretched the service administratively, as it could not lift the lien on their accounts as quickly as it wished. Thus, the FIRS directed banks to lift restrictions on such accounts to allow affected tax companies regularise their tax status within 30 days and begin to make arrangements for the liquidation of their tax liabilities.

    According to the FIRS chief, the Service’s decision to place lien on accounts of businesses, corporate organisations and partnerships with an annual banking turnover in excess of N1billion, but without tax identification, was announced at a stakeholders’ meeting last September.

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    Fowler said: “Our position was that if you charge VAT, which is not your money; or deduct Withholding Tax from vendors and you have no tax identification, you cannot even pay tax to the FIRS because you can’t pay without tax identification. So these operators were defrauding the society and the nation by charging consumers VAT, by deducting Withholding Tax and not remitting on behalf of other taxpayers. We had over 3,000 of such and we said if they do not come forward, we’d follow the law and do what they call substitution.

    Service made some administrative errors, which made banks place restrictions on accounts of a few companies with tax identification. This, he explained, arose from wrong information from the banks. But restrictions on such, he added, were lifted within 24 hours in addition to tendering of formal apology to those impacted.

  • FIRS goes after 85,000 millionaire tax defaulters

    OFFICIALS of the Federal Inland Revenue Service (FIRS) are on the trail of some 85,000 millionaire tax defaulters as part of its efforts to shore up government revenue base.

    FIRS Executive Chairman Tunde Fowler made the disclosure yesterday when  Acting Inspector-General of Police (IGP) Mohammed Adamu visited him at the Revenue House in Abuja

    A statement signed by Wahab Gbadamosi, Head Communications & Servicom Departments quoted Fowler as saying that “the Service had realised the sum of N23 billion for its closer look at the books of over 45,000 tax defaulters, each of which had over N100 million as turnover in their accounts, while the Service is going after another set of 40,000 millionaire tax defaulters in 2019.”

    The statement reads: “On Thursday (yesterday), Fowler said that the FIRS had identified 45,000 millionaire tax evaders last year, 2018 and recovered the sum of N23 billion through substitutions of their bank accounts.

    “He thanked the police for its support and collaboration over the years which he said has helped FIRS to achieve its target and requested for more support to enable it recover due taxes from more 40,000 rich tax evaders in 2019.

    “Fowler told the Acting IG Police that the Service will collaborate with stakeholders like the police to go after wealthy tax defaulters in 2019. He requested the olice to help the Service bring the tax defaulters to pay their taxes.”

    In the statement, Gbadamosi noted that “earlier at the management retreat at Eko Hotels in Lagos, last month, Fowler spoke of FIRS’s plan to identify and tax bank account holders with over N100 million as turnover but with no evidence of tax payment.

    He reported Fowler as saying: “We looked at businesses, partnerships of any activity that has banking turnover between N100 million and N999 million. We have done the review of this group of businesses.

    “We have about seven more banks that we are still waiting for return from and to review their information. So far, we have 45,361 that have TIN and are making payments.

    “We have 40,611 that have TIN, that made tax payment and, and we have 44,504 that have no TIN and no pay. So, when you look at it from a glance, we have close to 75,000 in this group that are still not taxpayers and we have said the payment of tax is not only for the civil servants. It’s for all Nigerians. So, the millionaires and the billionaires will pay tax on behalf of what is due to the national coffers.

    “Let me put on record that the Nigeria Police Force has been extremely helpful to FIRS. Without the police, I doubt that the Service would have been able to achieve what we have achieved. 2018 was a successful year. The FIRS collected a total of N5.320 trillion of tax revenue. This is the highest revenue collection in the history of FIRS.”

    IG Adamu pledged that the police will continue to support the FIRS because the job of revenue generation is critical to the survival of the nation.

    He said: “We feel that the work you do is one of the most important for the survival of the country. And you need to be supported from all angles so that you achieve what you want to achieve to the benefit of every Nigerian.

    “We will continue to work with you to improve security so that people would do their businesses here, make profits and pay their taxes. We believe that with the new Management team of the police, which is adopting community policing, we would be able to improve security.”

  • Tax debt: FIRS shuts DN Meyer, Morrison, others

    IT Federal Inland Revenue Service (FIRS) has sealed the premises of DN Meyer Plc, Morrison Industries Plc and seven other companies in Lagos. The excercise is in line with  its plan to reciver more tax revenue from tax-owing companies.

    The enforcement exercise, which ran from Monday through Wednesday, also affected Grizi Nigeria Limited, African Paints Nigeria Limited, Congas Oil, J. Irorun Enterprises and Kesley Greene Nigeria Limited.

    DN Meyer’s office, located at 34, Mobolaji Johnson Road, Oregun, was shut over a tax debt of N54.6 million. The FIRS enforcement team, led by Mrs. Ruth Mandeun, also sealed off the office of Congas Oil, located on the same street with DN Meyer, over tax liabilities of N24.2 million. The office of Morrison Industries Plc was shut over the company’s tax debt of N19, 813, 450.80.  African Paints Nigeria Limited suffered a similar fate over its N11, 146, 453.57 liabilities.

    At the premises of Grizi Nigeria Limited, located at Industrial Estate in Oregun, the team shut the administrative building of the company, which owes N11, 351, 640.30 in Company Income Tax. J. Irorun Enterprises Nigeria Limited, with a tax debt of N11.59million; Kelsey Greene Nigeria Limited, owing N4.325 million; Persus Ventures Nigeria Limited, with a debt of N40, 831, 878. 00; and Best Aluminum Limited, with liabilities totaling N21, 565, 728, were also shut.

  • FIRS nets N5.3trn from taxes in 2018

    The Federal Inland Revenue Service (FIRS) has declared it collected a total of N5. 320 trillion from taxes in 2018.

    A statement from the FIRS said its Executive Chairman Tunde Fowler made the announcement in Lagos on Monday at a retreat with the theme: “Parliamentary support for effective taxation of the digital economy”.

    He also stated the agency is targeting N8 trillion for 2019.

    Fowler said: “The N5.320 trillion collection is the highest revenue ever generated by FIRS in history.

    “The highest in FIRS was N5.07 trillion generated in 2012. FIRS’ generation of N5.3 trillion is significant as it was at a period when oil prices averaged $70 per barrel.

    “Oil price was at an average of $100 to $120 per barrel between 2010 and 2013.”

    He added: “Non-Oil component of the N5.320 trillion is N2.467 trillion (53.62 per cent) while oil element of the collection is N2.852 trillion (46.38 per cent).

    “From audit alone, FIRS collected N212,792 billion from  2278 cases with a huge reduction in audit circle.

    “While we have been steadily increasing revenue collection over the years, our cost of collection has actually been going down.

    “In 2016 we collected N3,307 trillion, in 2017 we collected N4,027 trillion and in 2018 we collected N5,320 trillion.

    “Meanwhile, the cost of collection as a percentage of actual taxes collected has been reducing; in 2016 it was 2.6%, in 2017 it was 2.49% while in 2018 it was 2.14%.”

    The agency, he said, “has been making tremendous efforts in also increasing the amount of non-oil revenue it collects.

    “Non-oil collection has contributed 64.99% in 2016, in 2017 it contributed 62.25% and in 2018 it contributed 53.62%.

    “This represents the government’s focus on increasing non-oil sources of revenue and the diversification of the Nigerian economy.”

    To achieve this feat, the FIRS boss also stated various initiatives were implemented by FIRS to enhance tax administration and make taxation as easy as possible.

    Some of these innovations, he said, include FIRS deploying ICT initiatives that will enable a taxpayer to pay taxes from anywhere in the world, at any time.

    “With the e-payment channel one can pay taxes with the click of a button and one can also download their receipts.

    ‘’Other e-Services are the e-Registration, e-Filing, -Stamp Duty and e-Tax Clearance Certificate.”

     

  • N9.8bn tax debt: FIRS shuts NDPHC HQ

    The Federal Inland Revenue Service (FIRS) yesterday sealed off the headquarters of the Niger Delta Power Holding (NDPHC) over tax liabilities totalling N9, 831,368, 259.90.

    Led by Mrs. Anita Erinne, the FIRS enforcement team went to the NDPHC headquarters at the Central Business District in Abuja with a warrant signed by the FIRS Chairman, Mr. Tunde Fowler.

    According to the warrant, the liabilities, comprising of Corporate Income Tax, Education Tax, Value Added Tax and Withholding Tax were incurred between 2007 and 2017.

    The FIRS had on Thursday  also sealed the premises of defaulting companies in Lagos. Among these was Pormat Peters located at 1-5, Pormat Drive, Abule Egba, over a tax debt of N504 million. A similar fate befell Niger Insurance Plc which owes N190.9million.

    Managing Director of the insurance firm, Mr.Lawal Mijinyawa, told FIRS team that he and the finance manager were unaware of the tax debt because they had just resumed at the firm, a plea that was ignored.

    The team also sealed ANSA Systems Limited, located at 133A, Eti-Osa Street, Dolphin Estate, Ikoyi. The company has tax liabilities totalling N17 million.

    An employee of the company admitted the debt profile and pleaded that the premises should not be shut, as it has paid N2million out of the amount owed.  But the leader of the FIRS team, Mrs. Aisha Duze, rejected the plea on the grounds that the company could not provide evidence of payment.

    “Since you cannot show us evidence, we have to seal your company. That is the mandate given to us,” she said.

  • FIRS generates N5trn revenue

    The Federal Inland Revenue Service (FIRS) generated N5 trillion in the second week of this month.

    It said by the end of this year, it would have generated N5.3 trillion revenue.

    Its Executive Chairman, Mr. Tunde Fowler, in a statement yesterday expalined that if the agency succeeds  in pooling the N5.3 trillion revenue, it will mark the highest revenue ever generated by agency in history. “The highest in FIRS history is N5.07 trillion generated in 2012,” he said.

    The FIRS’ generation of N5 trillion is significant as it was recorded in “a period when oil prices oscillated between $50 and $70 per barrel. Oil price was at an average of $100 to $120 per barrel between 2010 and 2013” the statement said.

    The statement explained that Mr Fowler spoke  during the induction of new members of the Joint Tax Board (JTB) yesterday in Abuja.

    He said: “FIRS has been able to record significant achievements following maximum support from the Presidency, Ministry of Finance, the JTB and other taxation stakeholders.

    “This year, the FIRS, with the support of the Presidency, Ministry of Finance, the JTB and other stakeholders, has been able to generate up to N5 trillion. We believe that we should be able to close at least at N5.3 trillion which should be the highest in the history of FIRS. And we believe that with that additional revenue, the state and Federal Governments would be able to provide more services and more development to the people of Nigeria.”

    Fowler urged the new JTB inductees to equip themselves with new ideas and embrace Information Communication Technology (ICT) to be able to face the reality of revenue collection in the ever-changing society.

    This new development he said indicated that “we should be able to develop the ability to accept and embrace positive change, maybe due to the fact that change is inevitable, but more significantly that oftentimes, change presents us with the rare breaks that we can exploit to advance individual and collective goals and objectives.”

    The FIRS chief also stated that as the global society continues to transform in structure and process, especially with new technologies and ways of doing things, the role that has been presented before tax administrators in an emerging economy such as Nigeria are quite enormous.

    He said: “Rather than being overwhelmed by the rapid changes of the 21st century, taxmen should remain undaunted and see the opportunities that are possible to us as a people in general and as tax administrators in particular.

    “I believe that history has placed this responsibility on each and every one of us here today to be the critical success factors in our quest towards ensuring sustainable revenue generation for our various jurisdictions and for our country as well.”

    Developments in global politics and economics, he noted, “indicate a trend towards increased deemphasis on proceeds from oil and other commodity exports. Huge investments are being made everyday by more advanced economies towards seeking alternative energy sources; and sooner rather than later, oil as a mainstay of the nation’s economy will indeed no longer be sustainable, it is just a matter of time.”