Tag: FIRS

Banks have been directed by the Federal Inland Revenue Service (FIRS) to identify and shut down any tax and levy collection accounts not authorised under the agency’s TaxPro Max system.

The FIRS’ directive is part of ongoing initiative to enhance efficiency, promote transparency and ensure uniformity in the collection and reconciliation of taxes nationwide.

In a notice titled: “Directive to close unauthorised FIRS tax collection accounts” and signed by the FIRS Chairman, Zacch Adedeji, the agency orders that all tax and levy collections must now be processed exclusively through assessments generated on the TaxPro Max platform.

Adedeji made the notice available to reporters through his Special Adviser on Media, Dare Adekanmbi.

According to the notice, all banks participating in the FIRS Collection, Remittance and Reconciliation Scheme are expected to comply with the new directive without delay.

The noticed asked the banks to discontinue the use of any unauthorised accounts for FIRS-related collections and to ensure that only transactions originating from the TaxPro Max system are processed.

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The notice reads: “We count on your cooperation to ensure a smooth transition to this centralised system, thereby contributing to a more transparent and efficient tax collection process.”

The TaxPro Max platform, developed in Nigeria, is a digital solution designed to facilitate key tax activities, including taxpayer registration, filing of returns, payment processing, and the issuance of tax clearance certificates.

It was introduced to streamline tax administration and support the FIRS’s broader goal of digitalising its operations.

The FIRS also encouraged taxpayers and stakeholders who may require assistance or clarification regarding the new directive to contact the agency’s Revenue Accounting and Refund Department (RAAD).

The Federal Inland Revenue Service (FIRS) has commenced a comprehensive review of all tax incentives under its administration, citing the need to improve transparency, eliminate inefficiencies, and ensure value for money in the country’s tax expenditure system.

This move was disclosed by the Executive Chairman of the FIRS, Dr. Zacch Adedeji, who was represented by the Coordinating Director of the Corporate Services Group, Mrs. Bolaji Akintola, at the Tax Expenditure Workshop held in Abuja on Tuesday.

Dr. Adedeji said the Service had already identified a number of infractions in the administration of tax incentives, as a result of ongoing monitoring and evaluation processes. 

He noted that the Tax Expenditure Management unit within the Service has been mandated to assess the foundational elements of all incentives, with early findings revealing major issues that require urgent attention.

Some of the problems uncovered include overlapping and, in some cases, contradictory tax incentives; lack of coordination among key stakeholders; absence of a central framework for managing incentives; and weak legislative oversight due to the non-existence of a dedicated tax committee in the National Assembly. 

Also cited were political interference in tax matters, concerns arising from the OECD’s Base Erosion and Profit Shifting (BEPS) Pillar II framework, and ambiguity around the rationale for granting certain exemptions.

According to Adedeji, “The Service strongly believes that data is life in tax expenditure reporting. That is why the Tax Expenditure Management unit will receive the necessary support from the Service to harness our integrated digital tax administration system, TaxPro-Max, and any other ICT tools needed to ensure accurate and efficient data collection.”

Looking ahead, the FIRS Chairman expressed the agency’s readiness to collaborate with regional and international organizations, including the Economic Community of West African States (ECOWAS), the International Monetary Fund (IMF), the World Bank, and the Addis Tax Initiative (ATI), in building a robust tax expenditure value chain that supports accountability and effectiveness.

He said while some abuses have already been observed, there are broader concerns around the continued relevance of many tax incentives currently in place. To address these issues, the FIRS is proposing several reforms, including amendments to the legal instruments that enable tax expenditures. These changes, Adedeji explained, are critical to addressing misuse, aligning the system with global tax reforms like the BEPS Pillar II minimum tax rule, and making the framework more adaptive to changing economic realities.

The FIRS also advocates the establishment of a centralized mechanism for regulating and monitoring tax incentives. Such an arrangement, it argued, would be able to conduct continuous cost-benefit analyses (CBAs) to determine whether each tax incentive remains justifiable. Duplications and overlaps among Ministries, Departments, and Agencies (MDAs) would be eliminated under this model.

The Executive Chairman stressed the urgent need for inter-agency cooperation to transform the tax expenditure ecosystem, especially as the responsibility for impact assessments and evaluations still lies largely with MDAs such as the Nigerian Investment Promotion Commission (NIPC), the Nigeria Export Processing Zones Authority (NEPZA), and the Oil and Gas Free Zones Authority (OGFZA).

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Dr. Adedeji drew attention to the growing pressure on FIRS to boost tax revenue collection at a time when direct contributions from some MDAs to the Federation Account are declining.

Despite these challenges, he said, the FIRS has managed to sustain significant contributions through reforms and strategic initiatives. In 2024, the agency collected a total of N21.6 trillion in tax revenue and is targeting N25.2 trillion in the current fiscal year.

Earlier at the event, Mr. Ikata John, Head of the Tax Expenditure Management unit, emphasized that while tax incentives play an important role in encouraging investments, supporting industries, and achieving policy objectives, their fiscal impact must be carefully managed.

He noted that poorly designed or inadequately monitored incentives can significantly reduce government revenue, defeating their original purpose. “This workshop provides a critical platform for stakeholders to examine whether the tax expenditures are achieving their intended goals and if the associated costs are being accurately measured,” he said.

Mr. John added that the FIRS remains committed to promoting a tax system that is fair, efficient, transparent, and accountable.

The Federal Inland Revenue Service (FIRS) has strengthened stakeholders engagement as part of its efforts to drive voluntary compliance.

According to a statement by Collins Omokaro, Special Adviser on Communications and Advocacy, the leadership of FIRS, Dr. Zacch Adedeji is prioritizing voluntary compliance over enforcement.

This is to ensure that taxpayers—especially those within the emerging taxpayers’ bracket—are well-informed and equipped to fulfill their obligations.

The goal is to ensure that tax administration in Nigeria evolves into a model of voluntary compliance rather than enforcement, which can only be achieved through consistent engagement, education, and trust-building.

The engagement, Omokaro said underscored FIRS’ commitment to deepening stakeholder relationships, simplifying tax processes, and aligning tax administration with a customer-centric approach.

He stressed, “The direction of the current administration is clear: tax reforms must be driven by transparency, collaboration, and technology to make compliance easier for businesses and individuals.”

He therefore said that such engagements will provide an opportunity to address key concerns, clarify misconceptions, and strengthen trust between the Service and taxpayers.

Speaking on the recent stakeholders engagement in Abuja, Omokaro stated that a major focus of the discussions was the need for greater awareness among emerging taxpayers, particularly within the informal sector, where many businesses and professionals remain outside the tax net due to a lack of understanding of their obligations.

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He added, “FIRS is tackling this challenge through expanded taxpayer education initiatives, strengthened partnerships with tax practitioners, and the deployment of technology-driven solutions that simplify tax compliance. The Service believes that a tax system built on seamless voluntary compliance, rather than enforcement, fosters a stronger economic foundation and enhances public confidence.”

He also noted that the FIRS 2025 Strategic Roadmap, which serves as a blueprint for modernizing tax administration, was also highlighted during the engagement. Built on three key pillars—Capacity Building & Training, Technology Advancement, and Facility & Infrastructure Enhancement—the roadmap is designed to ensure that both taxpayers and FIRS officers are well-equipped with the knowledge and tools necessary for a more efficient and effective tax system.

“Beyond education, the engagement reinforced the importance of collaboration with tax practitioners, whose role in simplifying compliance processes is critical. We believe by working closely with professional bodies and associations, FIRS can bridge existing knowledge gaps, enhancing service delivery, and resolving taxpayer concerns more effectively. The session also provided an opportunity to recognize top taxpayers for 2024, celebrating their contributions to national revenue and encouraging a culture of compliance.

The event brought together key institutions, including the FCT Emerging Taxpayer Department, the Revenue Account Department, the FCT Tax Practitioners Association, and the Maitama Emerging Taxpayers Office, along with the FIRS TaxPro Max team. These interactions are essential in strengthening the feedback loop between taxpayers and the FIRS, ultimately leading to improved policies and service delivery.

The Federal Inland Revenue Service (FIRS) has pledged its commitment to advancing tax policy formulation and capacity-building efforts, not only within Nigeria but across the entire West African region. 

This commitment was made by the Executive Chairman of FIRS, Dr. Zacch Adedeji, during the opening session of the West Africa Tax Administration Forum (WATAF) Country Correspondents Conference/Training for Heads of Corporate Communications Functions and the 20th WATAF Council Meeting in Abuja.

Speaking at the event, Dr. Adedeji acknowledged the role of tax policy in driving sustainable economic development and the crucial need for countries within the region to strengthen domestic resource mobilisation.

“The FIRS recognises the importance of domestic resource mobilisation in achieving economic development and growth,” he said, reiterating the agency’s willingness to support initiatives aimed at improving tax systems in West Africa.

He also addressed the importance of effective communication in the realm of tax administration, noting that the ability to convey clear, accurate, and timely information to taxpayers plays a critical role in fostering voluntary compliance and building trust between tax authorities and the public.

“The role of effective communication in tax administration cannot be overstated,” Dr. Adedeji stated, as he addressed the conference participants, comprising Country Correspondents and Heads of Corporate Communications from various tax institutions across West Africa.

“As Country Correspondents and Heads of Corporate Communications, you are the frontline ambassadors of our tax institutions, responsible for shaping narratives, clarifying policies, and fostering voluntary compliance,” he said.

Dr. Adedeji encouraged participants to take full advantage of the platform provided by the conference to exchange ideas, forge stronger professional relationships, and adopt best practices that could improve tax administration in their respective countries.

He urged them to actively engage in discussions, leverage the gathering to strengthen professional networks, and apply the knowledge gained to enhance the efficiency and effectiveness of tax systems in the region.

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Reflecting on Nigeria’s longstanding role in promoting tax cooperation, the FIRS Chairman recalled that the country has consistently played a leading part in supporting regional collaboration efforts. He noted that Nigeria has been a significant contributor to the growth of WATAF through the provision of technical assistance and capacity-building programmes tailored to member countries.

“Historically, Nigeria has always been at the forefront of promoting international tax cooperation and has been a key contributor to the development of the West African Tax Administration Forum (WATAF), providing technical assistance and capacity-building programs to member countries,” Dr. Adedeji said.

He further observed that the success of tax administration in the region is deeply tied to collective action and knowledge sharing, stressing that no country can effectively tackle the evolving challenges of tax administration in isolation.

“Our country has also been at the forefront of promoting regional cooperation in tax administration, recognising the importance of collaboration in addressing common challenges,” he added.