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Tag: FIRS

  • N1.38b tax dispute: Ashaka Cement sues FIRS

    A manufacturing company, Ashaka Cement Plc, has sued the Federal Inland Revenue Service (FIRS) before the Tax Appeal Tribunal, North West Zone sitting in Kaduna over a N1.38 billion tax dispute.

    The suit was filed by company before the tribunal chaired by Justice Bashir Albasu.

    Other members of the panel are Eberechi Adele (SAN), Joshua Waklek,  Khadeeja Halilu and Dr Olumhense Imoisili.

    In its statement of claim, Ashaka Cement Company expressed disagreement with  the tax assessment made by the FIRS and prayed  the tribunal to review the decision.

    It said that in December 2014, the respondent (FIRS) commenced a Tax Audit Exercise on the appellant company for the  2013 financial year.

    “Subsequent to the exercise, the respondent issued an invitation/demand notice dated December 2, 2014 on the appellant assessing unpaid tax liabilities which the its representatives attended on December 15,2014.

    “The invitation/demand notice contained the breakdown of the assessment made by the respondent.

    “The appellant received the said letter on the December 4, 2014. The appellant responded to the said notice by an objection letter dated December 22,2014 and served it on the respondent on December 29,2014,”Ashaka Cement said.

    According to the company, the service of the objection letter was preceded by a reconciliation meeting held between the appellant’s representatives and the respondent’s representatives on December 15,2014.

    The appellant claimed that vital issues contained in the respondent’s notice were discussed and ironed out.

    Ashaka Cement argued that the grounds of objection raised by in its notice was a reflection of issues raised, canvassed and agreed upon at the reconciliation meeting.

    It noted that the company assessed its tax liability on technical fees based on estimate only and all supporting documents were attached in form of appendixes 1-12.

    “The relevant regulations require that technical fees computations prepared by an operating entity in Nigeria be reviewed and certified by a qualified chartered accountant. In this instance, the appellant has only made estimate of technical fees payable. This has not been certified or paid,” the company said.

    The company said despite the reconciliation meeting held between the parties, the respondent on the January 6,2015 finally issued a notice of refusal to amend the assessment.

    Ashaka Cement said it further wrote to FIRS on March 2, 2015 and April 16, 2015, asking the tax agency to reconsider its position by reviewing the assessment of the Tax Audit Exercise for the year 2013.

    The company said the request was declined which prompted it to instruct its counsel to file an appeal with the Tax Appeal Tribunal but could not do so within the statutory 30 days allowed by the Company Income Tax Act.

    Counsel to the appellant, Mr A. Dauda  informed the tribunal last week that steps had been taken to effect service of the required processes on IRS, the respondent organization.

    In a related development, hearing in the tax dispute between the Kaduna State Board of Internal Revenue and Ahmadu Bello University Zaria, with respect to unremitted personal income tax of over N6 billion has commenced before the Tribunal.

  • First class air tickets cost more as FIRS raises new taxes

    First class air tickets cost more as FIRS raises new taxes

    LUXURY class fliers are paying more for their comfort on flights, it was learnt yesterday.

    The Federal Inland Revenue Service (FIRS), desperate to fatten Nigeria’s lean purse, has introduced new taxes. Among them is a N15,000 levy on first class and business class travellers.

    Besides, private jet owners are to pay taxes for enjoying the luxury.

    The battle to open other tax avenues is coming amid the bad fortune of  oil and gas —the economy’s live wire.

    FIRS Acting Chairman  Sunday Samuel Odugbesan, who led other officials of the Service, spoke when they visited Senate President Bukola Saraki in Abuja.

    Besides the downward slide of oil price, according to the FIRS boss, there are  insecurity, the uncertainty caused by the general elections and the late passage of the 2015 budget.

    Odugbesan told the Senate President that the FIRS collected N697.07 billion from Petroleum Profit Tax in the first six months of the year. The non-oil component income tax, yielded N778 billion between January and June and Value Added Tax N376billion.

    He said the FIRS was expecting between N12 billion to N15 billion monthly from the Nigeria Customs Service (NCS).

    The FIRS boss put the annual target at N1.4trillion; N123.74bn is expected monthly.

    He described the total tax collection as “the worst performance for the oil industry in the last 15 years”, saying the Service collected only N50bn from the sector.

    Odugbesan explained that the reason for this was because three major oil companies had nothing to pay because of the huge increase in cost of production.

    He said the FIRS was already working out new tax regimes to shore up its revenue collection.

    Part of the new tax regime, Odugbesan said, is to tax private jet owners, mansion owners and traveller who fly business and first class.

    Odugbesan said the FIRS was made to understand that there are more that 130 private jet owners in the country.

    He said the FIRS raised N100 million from a particular company that operates private jets.

    He added that it planned to convince the government to tax those who fly first class and business class.

    Odugbesan said: “We received a letter inviting us to appear before you so that we can share some thoughts and we have given you copies of our presentation.

     ”This is as a result of many factors many of which are completely outside our control.

    “The price of oil in the international market that we all know has continued on the downward slide although in the last three months; it started gathering some momentum.

    “As at today, I think it averages $ 62, but the average we have computed is $59. That is what is obtainable today.

    “So what is within our purview is actually what intervention we can make to shore the collection from non-oil sector.

    “As at the end of June, we have not actually got the total figures for June yet, which just ended yesterday. And for JP Morgan that is assisting the Federal Government to collect foreign component of our collection, they will still give us report a week after the close of the month.

    “Why is it low this way? Everyone knows that for the first quarter and even the second quarter, there hadn’t been much activity in the land, the month of March and April, fears of uncertainty.

    “If you add that to the insecurity situation in the Northeast, most of our offices, they have to be hiding to do their work. It is that bad.

    “The other is that government is the biggest spender; when government sends money into the economy, it creates activity. Even the banks themselves would be in the position to loan out money to business entities.

    “You engage everyone. We see the oil sector as the sector that is really driving because it is the mainstay of the economy but we often do not realise that if government does not support that sector, through cash calls, virtually nothing would happen in the oil sector.

    “If government does not spend money, the withholding taxes from that sector is not realised and the value income tax is not realised, Bureau of Statistics will tell us that the aggregate level of consumption has actually gone down.

    “And that affects Value Added Tax because VAT is a consumer tax.

    “What is significant is that May/June, we are witnessing the highest collection in the last 10/12 years.

    “The spike here in June, which is taking in about N702bn for this month, it would be about N715bn at the end of the month by the time we include Nigeria Customs Service collection.

    On the challenges the FIRS is contending with, Odugbesan said:  “Since 2012, until the exit of my former boss, FIRS has no board, no substantive board. There are some actions that are very critical and are being delayed.

    “Encroachment into the powers of the FIRS but very recently the National Assembly passed an Act to establish the Abuja/FCT board of FIRS.

    “The law says government is at liberty to select who should do the collection for the FCT. And I think in the last 35 years, it’s been given to the FIRS.

    “Now you have an Act that empowers the FCT board to collect personal income tax within the FCT; you are taking away the powers of the FIRS to go into the consolidated account because they will now be taking that money for themselves. Low level of consumption in the economy.

    “There is no hiding place anymore. There will be transparency but we need information because without information, no tax administration in the world can function or perform effectively.

    “The Joint Tax Board (JTB) platform was developed so that all of us can speak as a country.

    “There are three states that have not keyed into that platform. Lagos State, for whatever reason, it could be borne out of fear, they always think that the centre wants to take their responsibility.

    “We were working to get everyone doing business in Nigeria into our system. We are also working with the Central Bank of Nigeria (CBN) to enable us have access into the account of everybody doing business in Nigeria.

    “The idea of collecting our VAT upfront from telecommunication companies, airlines operators and from the power sector has appealed to us.

    “And all the regulatory bodies have also given us their word. At the moment, it is only the airlines that we are collecting upfront within the country.

    “We have introduced some set of new taxes that are not in the law. We call them sub-charges on air tickets.

    “If you are travelling out, you pay N15,000. If you are a business class flier or first class flier.

    “We also looked at those who owned  private jets. We thought that you enjoy facility or asset, which most Nigerians do not have access to enjoy. We would levy something we call sub-charges on you.

    “And of course, Custom wants to do something like furniture sub-charge, mansion sub-charge.

    “Regrettably, we have not been able to administer this. One, we need assessment on about 130 private jet owners because we were made to understand we have up to that.

    “We raised assessment on them. One particular company we raised about N100 million on them.

    “We have our own doubts about some of these levies too. For instance some people who are flying business class or first class, N15,000. How many are they? How many people fly first class or business class. Will that N15,000 times that number guarantee the kind of revenue source that we need to finance it.

    “If you have mansion in Abuja, levy sometime two per cent on the value. Abuja wants to do property tax. So would that not be additional burden?

    Saraki said the country needed a broad-based efficient tax system.

    “The success of our revenue collection depends on FIRS. We need to develop and depend on the non-oil sector. Senate will be very stringent in its oversight.

    “The issue of surcharge is not the issue, the issue is how to expand the revenue through income tax. Tax holidays should stop.

    “We should stop deceiving Nigerians; the issue is how do we improve on company income tax. Some of the oil companies, how do we.

  • CITN: FIRS, McKinsey to raise tax revenues by N460b

    CITN: FIRS, McKinsey to raise tax revenues by N460b

    The Federal Inland Revenue Service (FIRS) and McKinsey are working towards increasing tax revenues  and adding N460 billion to Federal Government revenues in the next three years, President, Chartered Institute of Taxation of Nigeria (CITN), Dr. Olateju Somorin, has said.

    Speaking at a budget seminar in Lagos, she said the FIRS and McKinsey initiative is one of the measures being taken to close tax gaps.

    She said Messrs. McKinsey & Co. an international firm was engaged in 2014 to work with the FIRS to strengthen the tax body in tax collection in non-oil sector and provide technical assistance in the implementation of its capacity enhancement programme.

    She said the global growth performance has been weak and there has been volatility in oil prices. Nigeria is part of the global economy and therefore susceptible to development in the rest of the world economy.

    She said the 2015 budget is aimed at boosting the non-oil sectors of the economy and also to raise tax revenues.

    “The introduction of a luxury tax regime buttresses the fact that oil revenue is expected to play a less significant role in 2015 and future years. We hope that government will implement the National Tax Policy and be consistent in its fiscal and monetary policies designed to diversify the economy and increase the country’s tax base,” he said.

    Somorin noted that there are still leakages and incidences of non-remittance of requisite funds to Treasury by some agencies and that is why government issued an unequivocal directive to all revenue agencies to ensure remittances of their obligations to Treasury.

    “In the short term, Government is determined to improve tax revenues not by increasing tax rates but rather by first, strengthening our tax administration. It is worthy of note to observe that Government aims to plug leakages, increase the tax base and improve tax collection efficiency,” she said.

  • N245b generated in May, says FIRS

    N245b generated in May, says FIRS

    The Federal Inland Revenue Service (FIRS) yesterday said it generated about N245 billion last month, an improvement on the N198billion made in April.

    Its Executive Chairman,  Samuel Ogungbesan spoke yesterday in Lagos at the annual conference of the Nigerian Bar Association (NBA) Section on Business Law (SBL).

    Speaking during the Improving Nigeria’s Ease of Doing Business session, Ogungbesan said the agency was better positioned to ensure revenue drive is pursued.

    He said despite the fact that the nation has 37 tax authorities,  efforts were being made to ensure that the states move at the same tempo and step with the Federal Government for greater efficiency.

    He said the FIRS has in the last three months,  concentrated more efforts in three areas- tax administration, field operation and compliance and enforcement- to achieve results.

    Although he said the revenue for last month has not been recorded, the FIRS boss was confident that the agency made about N245 billion.

    Also speaking,  the Registrar General, Corporate Affairs Commission (CAC), Bello Mahmud stressed the need for the amendment of the Company and Allied Matters Act (CAMA) of 1990, to meet modern day realities as well as empower the body to enforce its regulations.

    He urged stakeholders to take advantage of the commission’s online registration procedure for faster and more efficient process,  just as he disclosed that the agency’s target was to get 20,000 small businesses migrate from the informal to the formal sector.

  • N245b generated in May, says FIRS

    N245b generated in May, says FIRS

    The Federal Inland Revenue Service (FIRS) yesterday said it generated about N245 billion last month, an improvement on the N198billion made in April.

    Its Executive Chairman,  Samuel Ogungbesan spoke yesterday in Lagos at the annual conference of the Nigerian Bar Association (NBA) Section on Business Law (SBL).

    Speaking during the Improving Nigeria’s Ease of Doing Business session, Ogungbesan said the agency was better positioned to ensure revenue drive is pursued.

    He said despite the fact that the nation has 37 tax authorities,  efforts were being made to ensure that the states move at the same tempo and step with the Federal Government for greater efficiency.

    He said the FIRS has in the last three months,  concentrated more efforts in three areas- tax administration, field operation and compliance and enforcement- to achieve results.

    Although he said the revenue for last month has not been recorded, the FIRS boss was confident that the agency made about N245 billion.

    Also speaking,  the Registrar General, Corporate Affairs Commission (CAC), Bello Mahmud stressed the need for the amendment of the Company and Allied Matters Act (CAMA) of 1990, to meet modern day realities as well as empower the body to enforce its regulations.

    He urged stakeholders to take advantage of the commission’s online registration procedure for faster and more efficient process,  just as he disclosed that the agency’s target was to get 20,000 small businesses migrate from the informal to the formal sector.

     

  • Lawyers, FIRS partner in tax payment

    Lawyers, FIRS partner in tax payment

    The Chairman,  Nigeria Bar Association, Abuja chapter, Agada Elachi has urged professionals to live up to their professional obligation by paying their taxes.

    The NBA chief who spoke in Abuja  on Legal Education at a one day workshop on taxation in Abuja, said,  all they want is to achieve, create, deepen and expand the knowledge-base of lawyers as far as  tax administration is concerned.

    He said: “As lawyers we must also lead the way in payment of taxes. We call on the Federal Inland Revenue Service (FIRS) to work out a template that supports the payment of tax by Lawyers and other professionals whose earning portfolio are different are different from those in that of salary employment.

    “It is now common knowledge that the future of Nigeria can only be secured by the diversification of our revenue base. The need for taxation is apparent and the incoming government has made it a focal point.

  • VAT may go up by 100 per cent, says FIRS

    VAT may go up by 100 per cent, says FIRS

    • Presumptive tax coming soon

    The Acting Executive Chairman of the Federal Inland Revenue Service (FIRS), Samuel Sunday Ogungbesan yesterday said the Value Added Tax (VAT) rate may likely increase soon to 10 per cent.

    He said the proposal to increase the VAT rate had been pending since 2007.

    He however said the increase in the VAT rate might lead to the repeal of some taxes and levies including education tax.

    He also said the FIRS might introduce presumptive tax for the informal sector.

    Ogungbesan, who spoke while briefing newsmen in Abuja, said with the new reforms being put in place, tax evaders will no longer have  hiding place.

    He said with the reforms, a tax payer can fulfill his obligation from “the comfort of his or her home.”

    He said: “Our VAT is the lowest in the sub-region, if not in Africa. If the need arises that we must increase VAT, we will. Nigeria’s VAT (five per cent) is the lowest because in some African countries, the rate is as higher as 20 per cent, 25 per cent and 27 per cent. In Ghana, VAT is 15 per cent,

    “The proposal to increase VAT to 10 per cent has been pending since 2007. We wanted to increase it in 2011 but political exigency, especially electioneering, did not make it possible.

    “We went to Council of State and proposed that we can increase VAT to 10 per cent and repeal education levy being given to Tertiary Education Trust Fund (TETFUND).”

    Ogungbesan said the 10 per cent VAT will hurt neither the economy nor Nigerians because some taxes and levies will be repealed.

    He added: “If the VAT is increased to 10 per cent, five per cent will still be available for sharing. We will repeal Education levy and out of the remaining five per cent, two per cent will go to TETFUND, 2.5 per cent to security and 0.5 per cent to NITDA for technology development.

    “We will engage the media, the labour, the academia, the Manufacturers Association of Nigeria (MAN) and other stakeholders before we raise VAT to 10 per cent.”

    He said the agency has embraced technology to ease tax administration and make its services accessible to tax payers.

    He added that the agency is doing this through the Integrated Tax Administration System (ITAS) and the e-tax and  VAT-Auto Collect, among others.

  • Jonathan appoints Ogungbesan FIRS acting chair

    Jonathan appoints Ogungbesan FIRS acting chair

    President Goodluck Jonathan yesterday approved the appointment of Mr. Samuel Ogungbesan as Acting Executive Chairman of the Federal Inland Revenue Service (FIRS).

    A  Coordinating Director at FIRS, he replaces Alhaji Kabiru Mashi who has served as acting Executive Chairman of the agency since 2012.

    His appointment, according to a statement by the Special Adviser on Media and Publicity, Dr. Reuben Abati, takes immediate effect.

  • Jonathan appoints Ogungbesan as acting Chairman FIRS

    President Goodluck Jonathan on Wednesday approved the appointment of Mr. Samuel Ogungbesan as Acting Executive Chairman of the Federal Inland Revenue Service (FIRS).

    Mr. Ogungbesan, a Coordinating Director at FIRS, replaces Alhaji Kabiru Mashi who has served as acting Executive Chairman of the agency since 2012.

    His appointment, according to a statement by the Special Adviser on Media and Publicity, Dr. Reuben Abati, takes immediate effect.

  • Why govt introduced e-filing, by FIRS

    Why govt introduced e-filing, by FIRS

    The Federal Government adopted e-filing to  simplify tax payment, Acting Executive Chairman of Federal Inland Revenue Service (FIRS) Alhaji Kabiru Mashi has said.Mashi, who spoke during a stakeholders’ forum hosted by the FIRS, the Nigerian Interbank Settlement System (NIBSS) and Systemspecs Limited, to create awareness on e-filing, said the target is to sensitise taxpayers on the benefits of electronic tax paying channels.

    Electronic filing, he said, is a self-service system, which enables tax payers to electronically file and submit their tax returns along with accompanying documentations.

    Mashi said the platform serves as a means of reducing time and cost of compliance for tax payers and reduces the interface between the taxpayers and tax authorities.

    “It provides added convenience for tax payers, who can now sit in the comfort of their homes and offices and upload their tax returns,” he said.

    He explained that FIRS is mandated by law to access, collect and remit taxes accruable to the government, saying that in discharging the function, it is also empowered to employ all lawful strategies to enable it fulfill its mandate.

    The Executive Director, Business Development, NIBSS, Mrs. Christabel Onyejekwe explained that the organisations plan to develop an e-solution, a platform that would make it easy to pay tax across every channel in Nigeria.

    Mrs Onyejekwe said: “The e-filing is a simplified form of paying tax by individuals and corporates. If you go to the platforms, there are self-assessments. That enables you to assess yourself on what is outstanding and what is required to pay and how you can make your payment,” she noted.

    The Managing Director/Chief Executive Officer, Systemspecs Limited, Mr. John Obaro explained that prior to the introduction of e-filing, payment of taxes, which was manually done, was very cumbersome.

    According to him, the creation of an electronic filing through the Remita platform, a payment engine has simplified tax payment. “A number of our organisations already use Remita to pay salaries, pension funds and others. But now, they are able to make tax payments to the FIRS on the platform. “When they do that through the platform, they don’t need to submit any document again because we are integrated at the back to the FIRS. With e-filing, the manual way of paying tax would be phased out gradually. There would be a period of transition ultimately,” he said.