The Nation Newspaper

Tag: tax collection

  • Fed Govt to raise non-oil revenue through aggressive tax collection

    The Federal Government said it has set an aggressive target to increase tax collection as part of efforts to shore up revenue from the non-oil sector.

    President Muhammadu Buhari dropped the hint at the 21st annual tax conference organised by the Chartered Institute of Taxation of Nigeria (CITN) yesterday in Abuja. The President was represented by the Permanent Secretary in the Ministry of Finance, Dr. Mahmoud Isa-Dutse.

    He noted that tax collection must grow in line with the growth in economy, lamenting that this has not been the case in Nigeria.

    The President said: “Our tax system must reflect the nature of our commercial activity levels. Oil is just above 10 per cent of our Gross Domestic Product (GDP) but it represents a disproportionate share of our tax revenue.

    “We will therefore develop a framework that mobilises revenue from the non-oil sector. Our tax system must be dynamic in order to respond to an ever evolving commercial landscape and to increasing technology driven business models.

    “As part of our drive to increase non-oil revenue, we have set an aggressive target for increasing tax collection. This is a reflection of the fact that the current level of compliance is low and in some cases, the effective tax rate paid by those that are compliant is lower than expected.

    “This administration has been instrumental to critical reforms in the Nigerian tax system, through for instance, the introduction of the tax amnesty regime under the Voluntary Asset and Income Declaration Scheme (VAIDS) and the Voluntary Offshore Assets Regularization Scheme (VOARS).

    “These measures have no doubt led to improvement in voluntary tax payment compliance by the citizenry.

    “On the VAIDS, for instance, 5,122 applications were received, at the end of July 2018, when the Scheme had gone through a 12 month cycle and entered sunset.

    “Out of these applications, 1,006 made full payment, 1,613 had outstanding payments to make and 2,503 fell under those who did not furnish adequate information on their tax status.

    “Arising from these applications, N92.67 billion tax liability was declared. N34.67 billion had been paid out of declared liability. The outstanding liability of N56.81 trillion will be paid in installments.

    “In all, 16,906 assets were declared under VAIDS. Of these, 3,317 are immovable assets, 13,771 are moveable assets, while 205 represented intangible assets & Investments.”

    Addressing stakeholders and players in the taxation sector in the conference tagged: “Taxation and national development: Unlocking the potential of taxation”, Buhari noted that Nigeria’s tax-to-GDP ratio, although has improved from six per cent to about nine per cent in the last three years, is still the lowest in the world.

    The Chairman of Heirs Holdings, Mr. Tony O. Elumelu, in his paper delivery noted that we can never talk about national development without the inputs from Micro, Small and Medium Enterprises (MSMEs).

    Elumelu said: “On one hand, our citizens demand good standard of living – education, healthcare, infrastructure, accommodation, security, moral values etc.”

  • Oluwo seeks use of monarchs in tax collection

    The Oluwo of Iwo, Oba Abdul-Rasheed Adewale Akanbi, Telu I, has called for use of traditional rulers in the collection of taxes.

    In a statement by his media aide, Ibrahim Alli, the monarch said government could exploit the closeness of traditional rulers to the grassroots by involving them in tax collection to boost its internal generated revenue (IGR).

    He urged the state government to identify trusted and resourceful traditional rulers and work with them to assist in generating revenue into its coffers.

    Oba Akanbi said abundant opportunities attached to the authorities of traditional rulers had not been utilised by successive governments.

    He said: “Now is the time for the government to introduce creative measures to solve challenges of tax collection.

    “Government at all levels should be creative and innovative in their approach to tax collection by co-opting traditional rulers to serve as intermediaries to make their subjects be alive to their responsibilities to the government by paying their taxes promptly.

    “Tax is a primary source of revenue for the government; everyone must be made to be committed to the development of the state.

    “Lagos is one of the economic viable states and its strength is linked to effective taxation. Osun as a developing economy must devise creative measure to generate its own revenue too and sustain its growth. People must be encouraged and made to taxes.

    “Monarchs are the closest rulers to the grassroots. Many of us are trusted and respected by the people. They see us as fathers and they listen and follow our instructions. Whatever we say is authority without questioning.

    “Monarchs, in the past, were active and key actors to tax collection. I think we can revisit the past and learn from how traditional rulers used to support government policies and programmes and make them work in their domains.

    “Today, there are still trusted monarchs. I am one of them. My people listen to me because they know I serve them. One of the means we can assist the government is to serve as intermediary in tax collection but there should be regularised platform to effect the arrangement.”

  • Lagos automates consumption tax collection

    The Lagos Internal Revenue Service (LIRS) has introduced an Electronic Revenue Assurance (ERA) system for hotels, restaurants, night clubs and event centres in the state.

    This is in compliance with the extant Hotel Occupancy and Restaurant Consumption Tax Law of Lagos State as amended. The law imposes a five per cent consumption tax on all expenditures made on products and services at the hospitality outlets in line with Section 2 of the Hotel Occupancy and Restaurant Consumption Law of June 2009.

    The ERA System ensures financial accountability and efficiency for collecting agents, accurate deduction and automatic, transparent remittance of consumption tax as well as rewards for consumers.

    Speaking on how the newly adopted technology works, LIRS chairman, Mr Ayodele Subair, said the ERAS using the Electronic Fiscal Device (EFD) is a software application/device that issues invoices and receipts to consumers bearing a unique QR code, detailing the items and/or services ordered and an embedded automation of consumption tax remittance in real time. To protect consumers, payments and receipts generated will be tracked and monitored to verify the authenticity of receipts issued.

    “We hereby implore owners of restaurants, hotels, nightclubs and event centres in Lagos State to embrace and comply with this new initiative not only because of the legal consequences of its violation but also for its mutual socio-economic benefits,” he said.

     

     

  • Fed Govt bars consultants from tax collection

    Fed Govt bars consultants from tax collection

    Tax consultants have been barred from assessing and collecting tax revenue on behalf of the Federal Government.

    This clarification was given yesterday by the new Acting Chairman of the Federal Inland Revenue Service (FIRS) Mr. Babatunde Fowler in Abuja when he met with members of the Joint Tax Board (JTB).

    Fowler admitted that consultants will be engaged by the FIRS to gather data only. He said the FIRS has under 1,000 staff in audit function. “So, you can imagine 1,000 staff trying to review or audit the books of 450,000 companies, it just won’t work, to improve the levels of transparency and accountability these consultants will only gather data, the law does not allow them to do assessment or collect revenue on behalf of government they’re just to assist our staff to collect data,’’ he said.

    The FIRS he said will do the assessment with the States Board of Internal Revenues (SBIRs) and issue the demand notices for the tax due.

    Some state members of the JTB had complained that many consultants come to make huge claims so that they can get huge commissions, but they don’t have the capacity to actually collect the huge revenue they claim to have collected in some states.”

    On recent calls for an upward review of the Value Added Tax (VAT) collected by the federal government, Fowler noted that “it is the responsibility of the federal government and the federal ministry of finance to decide wether that (VAT) will change.

    Fowler agreed that five per cent VAT charge was low when other countries that charge VAT both in West Africa and in Europe but those other countries have reached  the maximum level when it comes to paying taxes or public tax. “Those countries have 99 per cent tax compliance so I think we should first of all get there before we consider increasing VAT, when everyone is paying their taxes then we can look else where,” he said.

    In order to build on the achievements of his predecessors, Fowler said he would reach out to SBIRs for collaboration stressing that “there are many stones left unturned as far as our current tax administration processes are concerned. For example, it is common knowledge that administration of VAT is greatly hindered by many factors, ranging from inadequate coverage of vatable persons to non-remittances of VAT deductions, tax revenue loss in this aspect can only be imagined.”

    Speaking to reporters on how the FIRS will operate under his watch, Fowler said his strategy is going to change a bit.

    He said: “Our objective is to have 99.9 per cent level of compliance meaning that everyone and corporate entities that are taxable are captured in the tax net and pay the appropriate tax.

    “ FIRS will exchange information with states boards of internal revenue so that we have all the information on their own data base, we’ve given them ours already meaning that if there is any company that they don’t have in their data base they can capture such company so immediately we will have a growth in the number of tax payers at both the federal and state levels within one week.”

    The FIRS Chairman said the agency has identified and located taxpayers through sharing and exchange of information as much as possible, addng that it will conduct joint audit exercises by FIRS and SBIRs; carry out joint tax enlightenment and enforcement exercises.