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Tag: FIRS

  • FIRS: tax revenue hits N2.52tr in six months

    The Federal Inland Revenue Service (FIRS) has announced that it realised N2.52 trillion from various taxes from January to June 2018.

    The amount showed that the Service had realised 75 per cent of its total target for the year, which is an improvement over what was realised in the corresponding period in 2017.

    A report on the revenue performance by the Agency, submitted to the Minister of Finance, Mrs. Kemi Adeosun, confirmed that the figure represented  an increase of N746 billion, representing 42 per cent when compared to the N1.7 trillion total tax revenue realised in the corresponding period in 2017.

    An analysis of the total amount shows that N1.6 trillion was collected as Petroleum Profit Tax (PPT) as against N636 billion resulting in a variance of N532 billion.

    From the company income tax (CIT), the FIRS realized a total of N680 billion, which was N128 billion  more than the N551 billion in the previous year. The Value Added Tax (VAT) yielded a total of N536 billion in the period under review, which was N68.8 billion more than the N467 billion realised in 2017.

  • FIRS to explain N90bn drop in collection to FAAC

    The Federation Account Allocation Committee ( FAAC ) has resolved to go after all revenue generating agencies to see that they remit true and accurate accruals into the federation account.

    Next to be targeted, after the Nigeria National Petroleum Corporation (NNPC) underemittances has been addressed is the Federal Inland Revenue Service (FIRS).

    Addressing journalists over weekend on the resolve of the FAAC to go after revenue generating agencies, Chairman Finance Commissioners Forum Mr. Mahmood Yunusa disclosed that they will go after FIRS to explain why there was a drop in what they were suppised to remit to the federation account in May and June 2018.

    According to Yunusa, on FIRS, “if you look at the FAAC report, there was a sharp drop in FIRS’s May and June collections but there was no opportunity for us to actually engage the FIRS for them to explain to us why there was a sharp drop. I can’t remember vividly but the drop was about N90 billion.”

    “So FIRS also needs to tell us why the sharp drop. If they think they are not being sweated too, we will sweat them up because you cannot adopt a kind of arm-chair work – you just sit in your office what comes you take it and what doesn’t get to you, you don’t care to pursue it, no!”

    He noted that “at the state level, we are very willing to cooperate with the FIRS when it comes to VAT (Value Added Tax) remittance because we know as states, we even benefit more than the federal government when it comes to VAT. We are willing to work with FIRS to increase the generation of all the taxes that can be increased for the benefit of the entire country.”

    Yunusa warned that “It is not just NNPC, if Customs is not doing well we will engage them. We have been asking this questions, we have been engaging them. Every revenue generating agency has a target, and we will apply the necessary rules to ensure that we take value for why every revenue generating agency was established.”

    Yunusa reiterated that strengthening the revenue collection and remittance of same to the federation account was an issue FAAC had resolved to see to a logical conclusion.

    According to him, “part of the process of strengthening the system will be to take the collection and remittance of royalty from NNPC to the Department of Petroleum Resources (DPR) while the collection and remittance of PPT will also be returned to the FIRS in line with the law.

    Yunusa insisted that “this is part of the process that we are trying to strengthen and we are trying to adopt. It is there, it is part of the law under oil and gas, like in any other IOC, that all royalties should be collected and remitted to the federation account by the DPR, it is DPR’s responsibility. Before DPR collect that royalty, it has to make sure that the actual amount that is supposed to be remitted is remitted.”

    “If it is under remitted, the DPR will be responsible for the shortfall and I know DPR would not want to be responsible for a shortage that they are not even aware of. If you are supposed to remit X billion of naira, and you remit B billion of naira to them, they won’t accept because it is under remitted. The royalty is calculated and paid based on the oil lifted” he said.

    He added that “the same thing with PPT, the NNPC has to remit the same amount that has to be remitted to FIRS, if not the FIRS will not accept because they would not want to be responsible for the shortfall or under remittance that ordinarily they shouldn’t be responsible for. So that will balance the revenue collecting system. There should be a kind of check and balance. Had it been we had this, this issue wouldn’t have cropped up. That is the system we are trying to strengthen and adopt.”

    On the ongoing face-off between FAAC and NNPC, and the oil Corporation’s claim that exiting the Joint Venture Cash Calls agreement was responsible for the drop in remittance to the federation account, Yunusa said ” the Commissioners of finance forum has very experienced people, professional accountant some of whom have worked in the NNPC. We had a workshop on the JVC programme. Whatever it is, if you want to exit the JVC there is a model or a machinery that is in place, even if you dont understanding, come and tell us. What is JVC -it is a joint Cash Call – it is for me to bring x amount of money while the other partner also brings x amount of money to do a business. So I need to know what I am contributing and I equally need to know what the other party is contributing.”

    Goung forward, he queried NNPC that ” if I am contributing to a JV, I am investing and for every investment there should be return on investment. If there is no return on investment why should you invest? Why should government company invest? It is because it is not your personal company. Government company is your company and it should even invest more than you because your personal company could be restricted just for you and your immediate family. But government company, if it is well sustained, well maintained, well invested and well managed, it could serve even people that are yet unborn and it will keep on driving development in the country.”

    On the issue of hiring forensic auditors and consultants to work with the NNPC as suggested by the Federation Account Allocation Committee in March, the Chairman of the Forum said, “we are on course, but we want to take these problems one after the other. NNPC is not the only revenue generating agency in the country but NNPC is having this much attention because it is the major driver of revenue, all the tiers of government rely to some extent, on the revenue that is driven from the centre and the major contributor of that revenue from the Centre is NNPC and we can’t afford not to fix whatever problem we see or we presume is there in NNPC, we are risking the entire economy. Be that as it may, we are still sticking to our decision, by the time we solve this problem, we will look at other issues within the NNPC and other parastatals under ministries of finance and petroleum.”

    The engagement of the consultant he assured “is on course, we will sort all these issues out. NNPC as I have said, is the major contributor of revenue but that does not mean we should take our eyes off other revenue generating agencies like the Customs, FIRS, DPR and the non-mineral sector. We want to take these issues one after the other with a view to solving them entirely.”

    Speaking on why FAAC was cancelled three times in a series, Yunusa said, “we thought we had concluded our reconciliation where whatever that we have put forward to government based on our projections, is supposed to have been solved so that we can have FAAC, and then we move on. But due to some other issues, the government was not able to get the desired attention it supposed to have gotten in respect to the process we said should be followed.”

    However, from the reaching FAAC members, Yunusa said “the top management of the NNPC are out of the country for a meeting, by the time they return, all these things will be put to order. It’s just fair that if such decision should be taken, it should be in a joint session that will involve the Governor’s Forum, the Ministry of Finance, the NNPC as well as the Forum of Finance Commissioners. We are on course towards solving all the problems and we are focused.”

  • FIRS meets 75 percent of its 2018 target

    The Federal Inland Revenue Services (FIRS) realised N2,529,615,174,601.25  as  various taxes between  January and  June 2018,according to the  agency’s revenue performance report for the first half of the year, submitted to the Ministry of Finance.

    The figure is over 75percent of the FIRS’s total target for the year.

    The N2.529t  represents  an increase of N746,107,323,247.26  (or 42% ) over the N1,783,507,851,353.99 total tax revenue realized in the corresponding period in 2017.

    An analysis of the total amount shows that N1,168,627,365,306.67 was collected as Petroleum Profit Tax (PPT) as against N636,170,585,753.57 – a difference  of N532,456,779,553.10.

    From the Company Income Tax (CIT), the FIRS realized a total of N680,093,730,362.25, which is  N128,151,996,465.68 more than the N551,941,733,896.57 in the previous year.

    The Value Added Tax (VAT) yielded a total of N536,525,540,228.39 in the period under review, which was N68,841,756,240.06 more than the N467,683,783,988.33 realized in 2017.

    The Education Tax brought in N77,191,051,329.11 compared to the N58,868,372,910.79 in 2017, showing an increase of N18,322,678,418.32

    The revenue from Stamp Duties was N7,492,592,658.35, which was N2,346,472,953.70 higher than what was realized in 2017 from Stamp Duties which was a total of N5,146,119,704.65.

  • FIRS seals 19 firms over unpaid taxes

    The Federal Inland Revenue (FIRS) has sealed 19 companies over their failure to fulfil their tax obligations.

    In Lagos, the FIRS enforcement team on Wednesday sealed the premises of Seabulk Offshore Operations Nigeria Limited in Lekki over a tax debt of N34.546million. It also sealed De Rembrandt Hotel (formerly Renaissance Hotel), Ikeja, which owes N30.60million.

    The tax agency’s team, led by Bukar Umar, on Tuesday, sealed the premises of Associated Port and Marine Development Company in Apapa, over N12.5million unpaid tax. Also sealed were Kunoch Limited in Ikoyi, which has a tax debt of N34.3million; Jinhua Group Limited in Ibeju Lekki, which owes tax liabilities of N3.1billion.

    The team sealed Anisha Enterprises in Apapa, which owes N24 million; and Citeco Global in Ikeja, which owes N99 million.

    In Port Harcourt, the tax agency, on Monday shut the offices of Benek Engineering Company Limited at Rumuodara over unremitted Value Added Tax of N137,961,981.53 dating back to 2014. It also sealed Arena Event Centre, which owes N25,063,999.10. The team in Port Harcourt, led by Mrs. Anita Erinne, equally sealed the offices of DSV Pipetronix LTD at Rumuibekwe Housing Estate. The company is indebted to the tune of N99,814,873.00. Another affected firm is

    Red Transport and Logistics. The company, which operates from Trans-Amadi Industrial Layout failed to remit Value Added Tax totaling N1,918,764,246.00. It equally shut Otopus Clan Nigeria Limited over a debt of N198,775,513.55.

    In Warri, Delta State, the FIRS team sealed Golden Tulip Hotel, Ashinmo Resources, Hotel De Great, West African Pumping Services Limited, Sam- Pira International Limited and Bridge View Hotel, among others.

    Mrs. Erinne advised the affected companies to pay the tax debts, so they could resume operations.

    ”The companies should endeavour to pay their tax debts so they could resume operations.

    ”We are not punishing you. Once you comply with payments we will come and unseal,” she said.

  • Tax: EFCC recovers N28b for FIRS

    The Economic and Financial Crimes Commission (EFCC) has recovered N28billion from tax defaulters for the Federal Inland Revenue Service (FIRS).

    Executive Chairman of the FIRS Babatunde Fowler stated this when he led a delegation to the Acting Chairman of EFCC, Mr. Ibrahim Magu.

    A statement by the Head of Media and Publicity of EFCC, Mr. Wilson Uwujaren said Fowler lauded the anti-graft agency for its “role particularly in the recovery of N28billion from various tax defaulters across the country.”

    He said: “Through the intervention of the EFCC, the agency has been experiencing high level of tax compliance and it’s yielding positive results”, he said.

    ”When tax defaulters are reported and invited to your office (EFCC), we see results, we don’t know how you do it, but we are seeing results and people are complying”.

    “The FIRS alone cannot curtail the activities of tax evaders without the collaboration of other national and international agencies such as the EFCC.

    The FIRS boss emphasized the need to strengthen the existing collaboration and synergy between the two agencies.

    He assured that his organization would explore every other means backed by law to ensure that taxes are paid and not diverted.

    He added: “If taxes are paid, funds would be available for government to provide the infrastructure needed for the socio-economic well-being of the citizenry.”

    Magu said: “The EFCC is ever ready to partner any agency, organization or individual in fighting corruption for the purpose of moving the nation forward.

    Both agencies have agreed to go after tax defaulters following the expiration of the Voluntary Assets and Income Declaration.

    A statement from the FIRS quoted  Fowler to have said recently, two banks came forward to comply on their own. I think that they must have heard words. We want joint assistance with the EFCC, especially now that VAIDS is over, to make sure that all tax defaulters get the lawful treatment.”

    Fowler said the government would deploy all powers within its disposal warning that “every taxable person in Nigeria now knows that we are ready to deploy all powers within our disposal to ensure that every tax defaulter is punished according to the law.”

     

  • Tax default: EFCC recovers N28bn for FIRS

    The Economic and Financial Crimes Commission (EFCC) has recovered N28billion from tax defaulters for the Federal Inland Revenue Service (FIRS).

    The Executive Chairman of the FIRS, Mr. Babatunde Fowler, made the disclosure when he led a delegation to the Acting Chairman of EFCC, Mr. Ibrahim Magu.

    A statement issued by the Head of Media and Publicity of EFCC, Mr. Wilson Uwujaren, said Fowler lauded the anti-graft agency for its “role particularly in the recovery of N28billion from various tax defaulters across the country.

    He said: “Through the intervention of the EFCC, the agency has been experiencing high level of tax compliance and it’s yielding positive results.

    “When tax defaulters are reported and invited to your office (EFCC), we see results. We don’t know how you do it, but we are seeing results and people are complying.

    “The FIRS alone cannot curtail the activities of tax evaders without the collaboration of other national and international agencies such as the EFCC.”

    The FIRS boss emphasized the need to strengthen the existing collaboration and synergy between the two agencies.

    He assured that his organization would explore every other means backed by law to ensure that taxes are paid and not diverted.

    He added: “If taxes are paid, funds would be available for government to provide the infrastructure needed for the socio-economic well-being of the citizenry.”

    Responding, Magu said: “The EFCC is ever ready to partner any agency, organization or individual in fighting corruption for the purpose of moving the nation forward.”

     

  • FIRS stops controversial insurance law

    To  ease the tension caused by a controversial provision of a tax law on insurance companies for over 10 years, the Federal Inland Revenue Service (FIRS) has asked its tax auditors to stop demands on the companies pending the amendment of the law.

    KPMG Head,Tax,Regulatory & People Services, Wole Obayomi, who spoke on the law, said FIRS Chairman, Babatunde Fowler broke the news at a meeting on the flawed law with the accounting firm.

    The flawed law is contained in Section 16(2) of the Company Income Tax Act (CITA) 2007.

    Some sections compelled the companies to pay out their capital in the form of a minimum tax because they are almost always in a never-ending refund cycle with the tax authorities.

    The controversial law has over the years remained a burden on underwriters and have severally called for a review of the (CITA) 2007, to relieve the heavy tax burden enshrined in the law. Specifically, National Insurance Commission (NAICOM) and the Nigerian Insurers Association (NIA) appealed to the Federal Government to suspend or waive some sections of the Act considered to be business unfriendly.

    Obayomi said KPMG has been acting for the NIA on the controversial law with the FIRS.

    He, however, disclosed that despite the instruction of the Chairman on the staff of FIRS to halt the implementation of the sections of the controversial law, the staff are still making demands from the companies.

    He said: “We met with the FIRS Chairman some few days ago and he told us that they know how onerous the provision is in the law and they support the call by the NIA to ensure that the industry is not destroyed by tax.

    “He told us that he has instructed the tax auditors not to make a demand on insurance companies based on the flawed provision. But we told him that this is not what is hopping on the field and that he need to call his team to order. So really, it is a case of the leadership giving order and the operatives doing something different.

    “What he finally said is that if the demand is made again, we should escalate it to him  on company by company basis. This, he said, is pending the time that the law will be amended. He has assured us of his support and we believe him”, he added.

    In Section 16(2)(a) of the CITA, the profits of a life business insurance company are calculated by taking management expenses, including commission, subject to subsection (8)(b) of the Act from gross income (investment income and revaluation surplus).

    For non-life businesses, section 16(1)(b) states that profits will be calculated for tax purposes by deducting the reinsurance cost and a reserve for unexpired risk (the premium corresponding to the time period remaining on an insurance policy), subject to subsection (8)(a) of the Act from a gross premium, interest and other income receivable in Nigeria.

    The relevant subsections of CITA are listed below “(8) An insurance company, other than a life insurance company, shall be allowed as deductions from its premium the following reserves for tax purposes:

    (a) for unexpired risks, 45 percent of the total premium in case of general insurance business other than marine insurance business and 25 percent of the total premium in case of marine cargo insurance;

    (b) for other reserves, claims and outgoings of the company an amount equal to 25 percent of the total premium, so that, after allowance under the Second Schedule to this Act as may be restricted, has been allowed for in any year of assessment, not less than amount equal to 15 percent of the total profit of the company for tax purposes.

    (9) An insurance company, in respect of its life insurance business shall be allowed the following deductions from its investment incomes and other incomes:

    (a) an amount which makes a general reserve and fund equal to the net liabilities on policies in force at the time of an actuarial valuation;

    (b) an amount which is equal to 1 percent of the gross premium or 10 percent of profits (whichever is greater) to a special reserve fund and accommodation until it becomes the amount of the statutory minimum paid-up capital;

    (c) all normal allowable business outgoing, except that after allowing for all the outgoing and allowance under the Second Schedule to this Act as may be restricted under the provisions of this Act for any year of assessment, not less than an amount equal to 20 percent of the gross incomes shall be available as ‘total profit’ of the company for tax purposes.”

    For both life and non-life insurance businesses, the basis for computing minimum tax seems punitive at 20% of gross income and 15% of total profit, correspondingly. To compound the tax burden little solace was given to the industry when they suffer losses.

    A thorough review of subsection (8) in the CITA Act exposes the inadequacy of parts (a) and (b). The former imposes a limit on unexpired risk while the latter restricts the deductibility of expenses. Section 16 (9) (c), in the case of life insurance business, introduces a new basis for minimum tax. In practice, the newly introduced minimum tax usually exceeds the minimum tax provisions of section 33 in the CITA. This puts the insurance industry in an unfair situation of paying a higher minimum tax than their peers in other industries in cases when the loss or a total loss of profits result in no tax being payable, or a tax charge that amounts to less than the minimum tax.

    Section 16(7) of the CITA restricts insurance companies to carrying forward tax losses for a maximum of four years. Losses that are not fully relieved after four years by an insurance company cannot be carried forward. Companies are made to pay taxes irrespective of the losses accumulated from preceding years.

  • FIRS eyes N6.747trn tax revenue

    FIRS eyes N6.747trn tax revenue

    The Federal Inland Revenue Services (FIRS) said it is targeting N6.747 trillion as tax revenue this year.

    Its Executive Chairman, Tunde Fowler, spoke yesterday in Lagos during the Institute of Directors (IoD) Members Evening, said N3.776 trillion is expected from non-oil  tax revenue which represents 58.62 per cent while N2.666 trillion  will come  from oil tax revenue which represents 41.38 per cent.

    Fowler, who is also the Chairman, Joint Tax Board (JTB), spoke  on Voluntary Assets and Income Declaration Scheme (VAIDS) at the forum.

    He said tax compliance level in the country was still below 10 per cent which he said is among the lowest in the world, with countries such as South Africa at 26 per cent, and Ghana at almost 16 per cent.

    He explained that Nigeria’s low tax revenues are inconsistent with the lifestyles and spending habits of a large number of the citizens.

    For instance, he said properties worth over N2 trillion in Abuja were not registered as tax payers.

    Besides this,  individuals and companies engage in schemes aimed at evading tax. He lamented that such actions deny the government funds to carry out development projects.

    He said the total registered individual tax payers was about 14.5 million, adding that the Service increased it by 40 per cent in 2016 from 10 to 14 million.

    Fowler said the FIRS intends to monitor statement of financial transactions by banks and  gathere information from other organisation to combat tax evaders.

    He said said tax amnesty granted between October 4 and November 25 ,2016 was a huge success.

    According to him, some firms are now paying taxes to government coffers.

    While 2,735 companies responded to the amnesty, N94.08 billion was recorded as liability.

    Out of this, FIRS received payment of N35.82 billion within the 45 days window.

    He noted however, that N58.26 billion  was still outstanding  even though the affected companies were making efforts to pay their debts.

    On the the amnesty granted in July last year,  Fowler   said the government  will penalise  tax defaulters who refused to take advantage of the window by the end of next month.

  • FIRS shuts tax defaulting firms in Lagos, Kano, Port Harcourt

    FIRS shuts tax defaulting firms in Lagos, Kano, Port Harcourt

    A multi-billion naira company, African Textile Management Limited was among four companies that were sealed up by the Federal Inland Revenue Services (FIRS) in Kano for non-payment of tax liabilities totaling N130.5 million during an enforcement exercise.

    Other companies affected include Dumma Company Limited, situated at NNPC Depot, Taura Road, Hotoro Quarters, which owes N24.4 million in Company Income Tax; Dennis Auto Supply Company Limited with a tax debt of N62.6 million and A.Y and B Nigeria Limited, a construction firm in Abuja with its branch office in Kano. The company is indebted to the tune of N29.9 million.

    On Tuesday in Port Harcourt, the FIRS enforcement team sealed the premises of Halden Nigerian Limited, located in Trans-Amadi Layout; Steve Integrated Technical Services Limited, Oil Field Services, Engineering and Equipment Leasing and Stemco Limited at Woji Road, GRA. The companies have tax debt profiles of N197.6million, N297.4million and N131.7 million respectively. Leader of the FIRS team, Mrs. Anita Erinne, told officials of the three companies that their tax obligations must be met before their premises would be reopened.

    Also on Tuesday, an FIRS team, led by Mrs. Ruth Mandeun, sealed-off Interior Specifics, located at Plot 697, Amodu Tijani Street, Victoria Island, Lagos, over a tax debt of N17.125 million. Equally sealed were MP Engineering Contractors and Swiss Trade Limited, which owe N79.324 million and N11.099 million respectively.

    On Monday, the service sealed Crown Realities, located at 3A, Lalupon Close in Ikoyi a tax debt of N86.3 million. The team also sealed-off Mega Equities Limited at 4A, Force Road, Onikan, Lagos. The FIRS said the company owes N144.9, a figure disputed by a member of staff of the company. Also in Lagos, the FIRS sealed Medplus Ph.

  • FIRS seals firms over N8b tax debt

    FIRS seals firms over N8b tax debt

    OFFICIALS of the Federal Inland Revenue Service (FIRS) yesterday sealed two companies in Delta and Edo over N8 billion tax debt.

    The leader of the enforcement team, Mrs Anita Erinne, said the companies were sealed over failure to remit over N8 billion taxes payable to the Federal Government.

    She said one of the affected companies (name withheld), located in Uvwie Local Government Area of Delta, was indebted to the tune of N121 million.

    She also revealed that the other defaulting company in Edo owed the government N8.1 billion.

    The team leader tendered separate “Warrant of Distraints’’ signed by the FIRS Chairman, Mr Tunde Fowler, to the companies to justify the exercise.