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Tag: FIRS

  • Senate probes FIRS, NPA, others for alleged fraud

    Senate probes FIRS, NPA, others for alleged fraud

    The Senate yesterday  resolved to probe alleged misuse, under remittance and other fraudulent practices in the collection and accounting of internally generated revenue (IGR) by revenue generating agencies.

    The probe, the Senate agreed, will cover all revenue generating agencies including the Federal Inland Revenue Service (FIRS), Nigeria Ports Authority (NPA), Nigerian Customs Service and others. It will cover between 2012 and this year.

    The resolution followed the adoption of a motion which prayed the upper chamber to “constitute a high powered ad-hoc committee to investigate the alleged misuse, under remittance/non remittance and other fraudulent practices in the collection, accounting, remittance and expenditure of internally generated revenue by all revenue generating agencies of government from 2012 to 2016.”

    A six-member panel of investigators to be headed by Senator Solomon Adeola, (Lagos West) was mandated to submit its report to Senate in plenary in six weeks.

    Senator Adeola who sponsored the motion in his lead debate noted that Section 80,subsection 1-4 of the 1999 Constitution (as amended) of the Federal Republic of Nigeria clearly stipulated that all revenue, moneys raised or received shall be paid as consolidated Revenue Fund of the Federation.

    He further noted that the Fiscal Responsibility Act 2007 was enacted to ensure transparency, accountability and prevent corrupt practices in relation to public revenues and expenditure.

    The lawmaker said  he was aware that Section 21 -23 of the Fiscal Responsibility Act 2007 clearly limited  corporations, agencies and government-owned companies listed in the Schedule to the Act to the expenditure of only a fifth of its operating surplus with the balance paid to the Consolidated Revenue Fund of the Federal Government.

    He expressed concern that the Acting Chairman of Fiscal Responsibility Commission, Mr. Victor Muruako on November 8 this year “raised the alarm over leakages in revenue and remittances which he said has assumed alarming proportion in the last five years with some Ministries, Departments, and Agencies (MDAs) producing two different statement of accounts in an attempt to manipulate their operating surpluses and losses.”

    Adeola said he was also aware that at “the last National Economic Council meeting, the Federal Government specifically accused  revenue generating agencies of raising over N1.5 trillion and expending over 90 per cent on recurrent expenditure mostly in paying bloated salaries and controversial allowances above Revenue Mobilisation and Fiscal Allocation Committee, monetisation of medical allowances, unapproved overseas travels, lavish training allowances and excessive personal loan approval all amounting to financial misconducts.

    He expressed worry that “these corporations, agencies and government-owned companies have over the years grossly violated the letters of the 1999 Constitution and the Fiscal Responsibility Act in relation to their revenue generation activities and expenditure.”

    Adeola said various audit queries against the agencies over the years further indicated possible mismanagement of public funds against the spirit of the constitution and Fiscal Responsibility Act.

    According to him, it is a matter of concern that in view of Federal Government dwindling revenue from the traditional crude oil sector and the on- going recession, “these government bodies continue to short change government of needed revenue through various illegal practices.”

  • ‘13.4million Nigerians in tax net’

    ‘13.4million Nigerians in tax net’

    State tax authorities have added 3, 414, 496 million new taxpayers to the national tax register under six months, bringing the total number of individual taxpayers in the country to 13.4 million, the Federal Inland Revenue Service (FIRS) said yesterday.

    Kano State led the new taxpayer roll with about one million taxpayers (944, 376). Lagos followed with 320,000 new taxpayers. Plateau State is third with 296,910, while Kaduna added 235,812 new tax paying men and women within the period.

    Zamfara State is fifth on the list of new taxpayers’ table with 136,773.

    Chairman Joint Tax Board (JTB), Tunde Fowler, who is also the Executive Chairman, FIRS, disclosed this at the Transcorp Hilton in Abuja during the 136th meeting of the board.

    Mr. Fowler noted that though the new 3.4 million roll of new taxpayers is cheering news, it is still a far cry of tax to Gross Domestic Product (GDP) ratio of 30 per cent which is the average in most developed countries.

    At the event,  the FIRS chairman; the Comptroller General of the Nigeria Customs Service (NCS), Hameed Ali (rtd); Corps Marshal of the Federal Road Safety Commission (FRSC), Boboye Oyeyemi; Comptroller-General of Nigeria Immigration Service (NIS) Mohammed Babandede, who was represented by N. E Graham, discussed how robust inter-agency cooperation could enhance tax compliance and optimise revenue collection.

    The Chief Executive Officers of the four agency heads, along with chairmen of the State Boards of Internal Revenue (SBIRs), also came up with fresh ideas on how real-time data sharing, automation of processes and operations by all SBIRs, revenue stakeholders, inter-operability of their databases, could enhance revenue generation and assist Nigeria to bake a bigger revenue cake.

    The target of the JTB is to increase the number of individual taxpayers to 20 million by December.

    The JTB chairman noted that about 10 states were already sharing Withholding Tax (WHT) and Value Added Tax (VAT) data with the FIRS under the VAT data automation project.

    This, he explained, was made possible by deployment of Information Communication Technology (ICT) equipment and installation of requisite software across the states.

    Soon, the JTB chairman promised, the Taxpayers Identification Number (TIN) cards would be upgraded to hold robust taxpayer data which all SBIRs, FIRS and authorised stakeholders could query for taxpayer data status.

    He announced too that the collaboration between FIRS and the SBIRs was yielding fruits as their teams now conduct joint audits, share information on unremitted taxes and taxpayer education in many states among others.

  • Senate rejects FIRS budget over alleged duplication of figures

    Senate rejects FIRS budget over alleged duplication of figures

    The Senate yesterday stepped down the 2016 budget of the Federal Inland Revenue Service (FIRS) over alleged shoddy preparation of the financial document.

    The upper chamber threw out the report of its Committee on Finance which considered the FIRS budget due to what it described as “the poor preparation of the document.”

    This is coming about four months after President Muhammadu Buhari submitted the 2016 budget of the tax collection agency to the Senate.

    The upper chamber referred the budget to its Committee on Finance for further legislative action on 25th of July, 2016.

    The Senate came hard on its Finance Committee for accommodating what it described as “glaring duplications in the budget estimates.”

    The lawmakers were categorical on their blame that the Finance Committee in its consideration of the N146,165,108, 293 billion budget proposal of FIRS failed to scrutinise subheads of the proposals.

    The Senate also agreed that the report submitted for consideration supported the Committee’s position that more oversight of the budget was necessary.

    Some Senators expressed concern that the FIRS budget estimates were “poorly compiled and incomplete.”

    They insisted that “the days where a partially prepared budget is sent to the Senate are over.”

    Some said the refusal to pass the budget should be “a strong signal to the Ministries, Departments and Agencies (MDAs) that there will be no more business as usual in the budget process as the Senate awaited the arrival of the 2017 federal budget.”

    The lawmakers also frowned at what they called “ambiguous figures and questionable inclusion of capital projects” in the budget

    Some of the proposals in the budget included: Office materials and supplies -N440,000,000;

    Library books and periodicals – N68,000,000; Computer materials and supplies- N530,000,000; Printing of non security documents – N1,900,000,000; Printing of security documents- N250,000,000; Maintenance of office furniture and equipment- N90,000,000; Maintenance of building office- N300,000,000; Maintenance of office equipments – N266,000,000; Maintenance of computers and IT equipments- N120,000,000; Maintenance of plants/generators- N170,000,000;

    Cleaning and fumigation services -N750,000,000; Office rent- N885,000,000; Security vote- N250,000,000; Legal services- N500,000,000; Motor vehicle fuel cost – N700,000,000; Generator fuel cost – N750,000,000; Refreshment and meals- N586,000,000; Hire of hall, accommodation and events- N350,000,000; Honorarium and sitting allowance payments- N150,000,000; Publicity, advert and taxpayers education- N2,000,000,000; Medical expenditure- N700,000,000; Postages and courier services- N244,000,000; Welfare packages- N681,000,000; Tax audit investigation and monitoring- N2,500,000,000; and Tax investigation- N500,000,000.

    Other estimates are Purchase of vehicles- N2,300,000,000; Purchase of furniture and equipment-general-N5,180,000,000; Acquisition of land and building- N5,586,300,000; Construction of offices- new projects-N300,000,000; Rehabilitation/Repairs- N4,028,000,000; Rehabilitation/Repair of offices- new projects- N415,000,000; Other infrastructure- ICT New projects- N555,000,000;

    Other infrastructure-ongoing projects- N2,026,000,000; FIRS corporate headquarters- N10,000,000,000

    The senators described some of the proposals as “curious” and wondered why the Finance Committee simply lifted the figures contained in the submission of FIRS into its report for the consideration of the Senate.

  • FIRS shuts hotel, drug firm, others over N306m debt

    FIRS shuts hotel, drug firm, others over N306m debt

    The Federal Inland Revenue Service (FIRS) yesterday shut another set of tax defaulting companies, in Abuja, Lagos and Sango-Ota over outstanding N306.82 million debts.

    In Abuja, the FIRS team sealed Bolingo Hotels and Towers at the Central Business District for an outstanding tax of N24,4million, which was accumulated from 2002. But the enforcement team, led by Bukar Umar Gana, could not locate Etat Consulting Limited in Abuja, which has a liability of N32.4million. The amount includes company income tax, withholding tax and education tax.

    In Lagos, FIRS sealed the offices of the Nigerian German Chemicals Limited, on Oba Akran Avenue, Ikeja, over a tax debt in excess of N146.6 million. Also affected is Trident Marketing Limited, Ajao Road, Ikeja, which is said to be indebted to the tune of N90.8 million.

    In Sango-Ota, Ogun State, the enforcement team shut Allied Atlantic Distilleries Limited, which owes over N45 million.

  • Tax debts: FIRS shuts firms in Warri, Lagos, Ilorin

    Tax debts: FIRS shuts firms in Warri, Lagos, Ilorin

    The Federal Inland Revenue Service (FIRS), yesterday ramped up its tax enforcement drive when its teams shut down premises of companies with tax liabilities in Warri, Delta State,  Lagos and Ilorin, Kwara states.

    In Warri, the enforcement team visited two companies. At JAD Construction, along Enerhen Road, the FIRS team evicted all its workers before sealing off the premises over unremitted taxes in excess of N400million, accumulated from 2013.

    Efforts by a management staff, simply identified as Mr. Ben, to present some tax clearance documents as prove of payment were rebuffed as the enforcement team insisted they had a duty to seal unless there was verifiable evidence of the payment of the said arrears.

    “These defaulters had the option of clearing the arrears to avoid being sealed even at the point we came in. Now they still have a duty to settle the debt to get unsealed. If they fail to settle the arrears or attempt to operate under FIRS lock and key, we have other measures of enforcement against them,” said Mandeun.

    At Bredero Pipelines Services at Sedco Road, Uvwie Local Government Area, the team met a team of policemen at the premises. The policemen claimed the company has been shut for more than three years following a court injunction restraining the workers or management from working pending the determination of court case between management and staff. The company has an aggregate debt tax of N178,638,649.90

    In Lagos, the enforcement team, led by Chinazor Edeh, visited Dee Jones Petroleum and Gas Limited at Beachland Estate, Apapa. The company is said to owe N31million, a tax debt the operational manager said he was not aware of.

    He later phoned the company’s tax consultant, who admitted that the company was owing but asked for more time to enable it pay.

    This was rejected by Edeh, who insisted that the company had to pay immediately or have its premises shut. He therefore ordered the premises shut.

    In Ilorin, the team visited Kwara Hotels, where its new management, Integrated Services Limited, explained that it was neither aware that the previous management had a N10.5million tax liability nor of correspondences between the hotel and the FIRS. The argument ended when a call was put the FIRS headquarters, which confirmed the existence of the hotel’s tax liabilities. The new management then signed an undertaking to reach the previous management and revert to the FIRS within 30 days.

    Also in Ilorin, the FIRS team visited Henry George Company Limited, which owes a little over N2million. But the company escaped being shut having paid a part of money the previous day and its officials were headed to the bank to pay the balance while the enforcement team was in the premises.

    Two days ago, an FIRS enforcement team visited the premises of Eagle Package Printing Limited in Otta, Ogun State, over a tax liability in excess of N21million. However, the company was not sealed, as members of its management ordered the payment of N10million.

  • FIRS grants tax reprieve to defaulters

    FIRS grants tax reprieve to defaulters

    The Federal Inland Revenue Service (FIRS) yesterday said it has granted a waiver of penalty and interest on tax liabilities to all firms between 2013 and 2015.

    Its Chairman, Babatunde Fowler, in a public notice, said the waiver only relates to accumulated penalty and interest but not principal tax due.

    Fowler said a 45-day window has been opened by the Service to enable affected firms to declare their indebtedness and present a payment plan on the outstanding principal tax liability, only acceptable to the Federal Board of Inland Revenue.

    The notice read: “The FIRS in exercise of its powers under section 85 (3) of the companies income tax act CAP C21 LFN 2007 (as amended) (and replicated in section 32 (3) of the Federal Inland Revenue Service Establishment Act (FIRSEA 2007) hereby invites all principal officers, especially chairmen, managing directors, chief executive officers, executive and non-executive directors, chief financial officers and all company owners or their representatives, to take advantage of a special window to avoid payment of penalty and interest on tax due between 2013-2015.

    “That FIRS, by this public notice, will grant a pardon stretching back to three years (2013-2015) to all tax payers in default provided that such defaulting tax payers; come forward to declare their indebtedness within the 45-day window and present a payment plan on the outstanding principal tax liability acceptable to Federal Board of Inland Revenue.

  • Importers, agents kick against proposed Customs, FIRS merger

    Importers, agents kick against proposed Customs, FIRS merger

    Stakeholders in the maritime industry have kicked against the proposed merger of the Nigeria Customs Service (NCS) and the Federal Inland Revenue Service (FIRS).

    Rising from an extra-ordinary meeting of the Association of Nigerian Licensed Customs Agents (ANLCA) in Lagos at the weekend, its President, Prince Olayiwola Shittu, said the core mandate of the NCS is not revenue generation but trade facilitation in an increasingly technology-driven world.

    To him, the difference between the two agencies is much and they cannot work together because of coordinated border management and the need to simplify the multiple regulations and inspections at porous border stations across the country.

    The Act which established the NCS, he added, is quite different from that of the FIRS and a new Act is needed ‘to marry the two strange bed-fellows together.’

    He said what the Federal Ministry of Finance and the FIRS needed to do  was to create a joint pro-business environment that would balance the needs of revenue collection and the facilitation of trade.

    Having played an important role in the World Customs Organisation (WCO) and the World Trade Organisation (WTO), he said the NCS needed a close working relationship with FIRS to boost revenue.

    Customs, he said, is a paramilitary organisation while FIRS is just a tax collector. “Customs is not a tax collector but a revenue generator,” Shittu said.

    The ANLCA chief said instead of a merger, the two agencies should create a platform where all revenue accrued to Customs at sea ports, airports and border stations would be seen by the FIRS officials.

    The ministry, he said, should insist that Customs must have a benchmark for all its transactions at ports so that its officials and tax evaders would no longer be able to manipulate the system.

    According to him, the benchmark would promote transparency and reduce leakages in the system.

    FMoF and the FIRS, ANLCA said, should also come up with a paperless transaction model that would make it possible for their officials to get simultaneous alert and information as importers or their clearing agents pay their duty and other charges to the banks.

    He said:“The core mandate of Customs is to facilitate trade, curb smuggling and generate revenue. Its mandate in terms of responsibility is higher than the mandate of FIRS which is just to collect all revenues that is going to the Federal Government.

    “Trade facilitation has become a major role seen by governments across the world as a crucial element of their economic policy, with the Customs occupying a unique position within the international supply chain of goods and services.

    “Customs has an enlarged role to perform in terms of competitiveness, speedy delivery of services and legitimate trade facilitation in a global environment harbouring a litany of threats like smuggling, cross border crime, money laundering and importation of injurious and hazardous substance to the port.

    “What we expect the FMoT and FIRS officials to do, is to formulate tax reform policies that must be implemented by Customs and other revenue collecting agencies.

    “It is not only Customs that collects revenue on behalf of the government at ports. The Nigerian Ports Authority (NPA), The Nigerian Maritime Administration and Safety Agency (NIMASA), the Nigerian Shippers’ Council (NSC) and other government agencies also generate revenue at ports.

    “What are they and the protagonists of merger going to tell Nigerians concerning the structures of NPA, NIMASA, NSC, SON? Are they saying the government should merge them without regards to their core mandates and independent functions they are known for internationally?”

    He said Customs duty may be a component of revenue to the government, but there are other Customs functions which are non-revenue collections such as enforcement of anti-smuggling and contraband initiative as well as the arrest and prosecution of smugglers.

    An importer, Mr Malik Ayeni  urged the Minister of Finance, Mrs. Kemi Adeosun to make the opening of ‘Form M’ mandatory for all importers to know the expected revenue that will come through the process.

    He condemned the practice which allowed importers not to follow the import Form M guideline and travel abroad to bring in their items into the country and subject the goods to single declaration process.

    “It is through the single declaration process that the Customs will physically inspect the items and also value it and that is the point where revenue leakage occur because it is what they value that the government sees as its revenue but nobody knows what has gone under the table before the value was given.

    “Will the merging of Customs and FIRS solve this problem? The answer is no. What the FMoF and FIRS need to do therefore, is to insist that every Bill of Laden must henceforth reflect their Form M number to block leakages.

    “Also, FIRS should look into the excise duty rate and see what is being imported for Customs to apply the duty rate appropriately,” Ayeni said.

     

  • Budget funding our biggest challenge, says FIRS

    Budget funding our biggest challenge, says FIRS

    • Govt to rely on taxation for funds

    The biggest challenge that the Federal Inland Revenue Service (FIRS) is currently grappling with is funding of the 2016 budget and subsequent ones.

    Its chairman, Tunde Fowler who spoke in Abuja yesterday while responding to questions from reporters after the opening ceremony of the meeting on “Transfer Pricing in the Economic Community of West  African States (ECOWAS), said the Federal Government has had a recourse to funding its budgets from taxation by ensuring that all corporations operating and making profit within the country pay the appropriate tax when due.

    The forum had: Protecting the Tax Base and Building a Strong Investment Climate Across the Region as its theme.

    Fowler urged all citizens whether in the state or local government to pay their right tax and levy, and assured that the FIRS would ensure optimal expenditure of the fund.

    He said: “The biggest challenge for FIRS this year is to fund our current and future budgets. But at the same time, being the largest economy, some people might say the second after the evaluation of the exchange rate .

    “However, we have to rely on taxation to fund our budget and subsequent budgets; and we have to ensure that all organisations operating within Nigeria, making profit within Nigeria pay the taxes that are due to Nigeria.

    “I think it is a collective drive. All of us in Nigeria, whether you are paying federal tax or state tax or local government levy, we just have to pay the right amount of taxes while we as administrators we do the best we can do with it.”

    Explaining the topic “transfer pricing”,  Fowler said it meant to make profit in one location and declare it in another place where there is  lower tax rate to deny the country where the income was generated the accruable tax benefits.

    He said:”What they are talking about is transfer pricing, because when profits are made in one location but declared in another location usually where the tax rate is lower.

    “So, let’s give a simple example. You might have companies- multi-nationals operating in Nigeria and declaring the profit in another country where the tax rate is lower. So, where the income is made or the interest is generated from does not benefit from the taxation.”

    The FIRS chairman said the challenges of price transfer has caused Organisation for Economic Cooperation and Development (OECD) $250 billion loss of taxation of which the West African sub-African region lost about $9million in the circumstance.

    He said: “It is a problem all over the world. Like I said earlier the OECD last year gave a figure of $250 billion loss in taxation. One of the speakers from ECOWAS (Economic Community of West African States) said within the West African sub-region, we are looking at between $3million and $9million.  If you convert that, you can imagine what it can do for any African country.

    “This forum has two focuses. One is to improve the level of tax administration, to exchange ideas and ensure hat the tax administration within the sub-region have to do with these issues. We have treaties whereby you will not be taxed in two different countries. This has nothing to do with double taxation. “

  • Furore over proposed merger of FIRS, Customs

    Furore over proposed merger of FIRS, Customs

    The proposed merger of the Nigeria Customs Service with the Federal Inland Revenue Service (FIRS) as recommended by a committee set up by the minister of finance has continued to generate mixed feelings amongst stakeholders with some lauding the initiative as timely and others arguing for a status quo. Ibrahim Apekhade Yusuf in this report examines the issues

    Faced with the reality of dwindling oil receipts due to the fall in global crude oil prices, most oil-producing countries are desperately seeking new streams of income to close the funding gaps.

    Of course, Nigeria, especially since the advent of this administration has considered fresh revenue streams as absolutely inevitable, especially away from oil.

    One avenue it hopes to achieve this objective is by generating revenue from taxes across the board both from the sea ports, land borders, whether in terms of corporate tax, income, Value Added Tax to mention just a few.

    In furtherance of this fundamental objective, the Minister of Finance, Mrs. Kemi Adeosun, had set machinery in motion to empower the Federal Inland Revenue Service (FIRS), which is the organ that generates revenue on behalf of the Federal Government towards delivering on the avowed mandate of ensuring improved revenue yield for the country to meet her obligations.

    Subsequently, the minister had empanelled a National Tax Policy reforms Committee headed by Professor Abiola Sanni on August 10, 2016.

    The Nation gathered that the mandate of the Committee was to advise the Federal Government on how to boost the Internally Generated Revenue among others.

    It is, however, instructive to note that this is not the first time the Federal Government is toying with the idea of tax reforms.

    Investigation by The Nation revealed that the Federal Government had empanelled a Study Group led by Dr. Dotun Philips few years ago to reform the nation’s tax policy.

    Giving insight on the activities of the Study Group, Chief Mark Dike who served as secretary of the Committee under Dr. Philips said the Group at the time made far-reaching recommendations for the efficient service delivery of the tax regime in the country.

    Thankfully, Dike said the Prof. Sanni-led Committee built on the work done by his Study Group.

    The policy, The Nation further gathered was first published in 2012 by the former Minister of Finance and Co-ordinating Minister of the Economy, Dr. Ngozi Okonjo-Iweala, to entrench a robust and efficient tax system in the country.

    Recommendations by Prof. Sanni-led Committee

    The Prof. Sanni-led Committee amongst other reasons stated that the merger of the Nigeria Customs Service with the Federal Inland Revenue Service (FIRS) would help improve administrative efficiency, reduce the cost of revenue collection as well as ensure accountability.

    Part of the recommendations of the Committee, The Nation gathered was to help the country move forward from its current position of 181 out of 189 countries to top 50 in the Ease of Paying Taxes World Report.

    At the end of the committee’s assignment, the draft of the reviewed national tax policy was presented at the committee’s second stakeholders’ engagement in Abuja by the West Africa Tax Leader at PricewaterhouseCoopers, Mr. Taiwo Oyedele.

    Speaking at the event, Oyedele said the committee agreed that the current system was encouraging multiple taxation, tax evasion and wastage.

    While noting that the current revenue generation system by both agencies as inefficient as their functions were duplicative, Oyedele said: “Part of our recommendations will be that the FIRS and the Customs should be merged. But not just them, but all revenue generating agencies at the federal level should be merged into one.

    “What we have right now is not effective because it duplicates the collection mechanism. All the structures you have in the FIRS are replicated in the Customs. So, the cost of collection goes up. It also makes it easier for tax evaders to manipulate the system. You can provide information for the Customs and the FIRS is not aware of it.

    “So if you have one revenue agency, it will flag all the information about a taxpayer when he or she is paying tax. It will also ensure that leakages in the system are reduced. This is why we are recommending merger of the agencies as part of the policy.”

    The Nation was reliably informed that the the Ministerial Committees’ report was due for presentation at the Federal Executive Council meeting last Wednesday but has been put on hold in the interim.

    Feeling the pulse of stakeholders

    Speaking with a cross sections of stakeholders they were noncommittal.

    When The Nation visited some Customs commands in Lagos, most of the officers and men spoke in hushed tones concerning the subject matter of the proposed merger.

    From the body language of most of them, you could tell the new policy initiative is not one they are happy about.

    “The policy is not something we’re comfortable about but whatever decision is reached by the Federal Government on the matter is left for us to carry out,” said one of the staff at the Federal Operations Unit, Ikeja, who asked not to be named because he was not authorised to speak with the press.

    When The Nation enquired about the proposed merger between the FIRS and Customs, the NSC spokesman, Wale Adeniyi said he was not aware of such a move.

    According to him, the customs high command led by Col. Hameed Ali (rtd) was not carried along in the scheme of things.

    “I’m only just hearing about that from you. However, l can say those proposing the merger knows why they are proposing it. I cannot react based on newspaper speculations.”

    His counterpart at the Ministry of Finance, Salihu Saleh, who is Director of Press was said to be in transit to the United States for the World Bank meeting and was yet to respond to emails sent to him as at press time.

    However, speaking with Mr. Wahab Gbadamosi, Head Communications and Liason Department of FIRS, he said the agency led by Mr. Babatunde Fowler, ordinarily cannot react because the FIRS is a parastatal under the Ministry of Finance.

    Support for merger

    Justifying the need for the merger, Dike said: “Most countries of the world have since merged the revenue collecting desk of the Customs with the revenue agencies and we have good examples both within the sub-region and other advanced economies.

    “Within the continent of Africa, l know for a fact that in South Africa, Kenya, Uganda, Rwanda, Ghana, they’ve since merged the revenue collecting arm of customs with the revenue organ of the state.

    “In more advanced countries like the UK and Canada, it’s the same thing. So I strongly support that it should be merged with the FIRS to ensure efficiency in tax collection and revenue generation as the case may be.”

    Eben Akinyemi, a tax consultant, is also on the same page with Dike. According to him, the move to merge both agencies revenue collecting arms as one will ensure efficiency in terms of service delivery and significantly reduce loss of revenue due to underdeclaration and overinvoicing as the case may be.

    Argument against merger

    Expectedly, there have been a welter of criticisms against the proposed merger of the FIRS and Customs, with those against the move citing technicalities in the operations of both bodies.

    In the view of Adebayo Shittu, there is no basis for the merger of NCS and FIRS as the statutory roles and responsibilities of the two government agencies are completely different from each other.

    According to him, “The NCS is a para-military organisation. That is one of the reasons why officers and men of Customs carry arms and ammunitions. As far as I am concern, the Minister of Finance did not get it right in seeking for the merger of the two government agencies.”

    The merger, he insisted,  will lead to the loss of several jobs and add to the high unemployment rate in the country.

    He argued that on the surface, the idea of merging both organisations looked desirable but is fraught with danger if the minister succeed in her plans through the Sanni-led NTP committee.

    Echoing similar sentiments, Barr. Olusegun Amao, a maritime lawyer said the country was not yet equipped to run such a policy. While not completely against the move, Amao would rather the government develop the right structures in place for it to work.

    How revenue agencies, customs operate abroad

    Most countries of the world  have customs and excise parastatals as well as agencies that collect revenue on behalf of the Federal Government.

    According to a document obtained on its website, the Canada Revenue Agency, or Agence du revenu du Canada, is the federal agency that collects taxes and administers tax laws for the Canadian government, as well as for many of Canada’s provinces and territories.

    Besides, the agency oversees a variety  of social and economic benefit and incentive programs via the tax system, along with international trade legislation.

  • FIRS generates N675b education tax in two years

    FIRS generates N675b education tax in two years

    The Federal Inland Revenue Service (FIRS) generated N675 billion as education tax between 2013 and 2015, its Executive Chairman, Babatunde Fowler, has said.

    Fowler spoke at the 7th FIRS joint interactive forum with Tertiary Education Trust Fund (TETFund) in Lagos, with the theme: Sustaining Education Tax Collections and Disbursements Under a Depressed Economy.

    A breakdown of the figures showed that the FIRS collected N279.4 billion in 2013, N189.6 billion in 2014 and N206 billion in 2015.

    Fowler said education tax collection had been affected by the fall in the international price of oil.

    He said: “We are all aware of the severe revenue challenges that Nigeria currently faces due to the fall in oil prices, among other economic challenges.

    “Education Tax is charged at the rate of two per cent of assessable profit of a company and it is assessed and collected by FIRS on behalf of TETFund. It is worthy of note that the education tax collection has been drastically affected by the challenges mentioned above.

    “From the figures, we could see slight improvement in 2015 collection (N206 billion), N189.6 billion in 2014 but far from the collection of N279.4 billion in 2013.”

    Fowler, who was represented by the Director of Career and Skills Development Department, Mrs. Junila Takon, said the FIRS generated N26.5 billion in the second quarter of this year.

    According to him, the targeted N149.8 billion from education tax before the end of 2016.

    He said: “Also, the collection in the second quarter of 2016 was a huge improvement on the collection in the first quarter (N26.5 billion against N8.2 billion)

    “FIRS, as the collecting agent, is making frantic efforts to ensure that the 2016 target of N149.8 billion is met and surpassed.”

    The FIRS chief said the agency would expand its tax base to meet its target for this year.

    Fowler said: “A number of strategies have been put in place to improve tax assessment and collection of taxes in general and education tax in particular.

    “Among the strategies are: expansion of tax base, tax drive to register 500,000 corporate taxpayers in addition to 700,000 already added to the tax net between 2015 and now.

    “Improvement of transparency in tax administration by making available details of tax collection; intensify more efforts on debt recovery and enforcement.”

    TETFund’s Executive Secretary, Dr. Abdullahi Baffa, advised the FIRS to improve on its education tax collections.

    Baffa said it was important for the revenue agency to grow education tax because of the current economic challenges in the country.

    He said: “The FIRS also has a major role to play by ensuring the improvement in the education tax collections that are made available to TETFund for disbursement to public tertiary institutions.

    “For the short and long-term survival of Nigeria’s tertiary education system and given the current economic challenges facing the country, it is necessary that the service must look for more creative ways of growing the education tax.