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Tag: Tax

  • Review Nigeria’s tax laws, Oshiomhole tells FG

    Review Nigeria’s tax laws, Oshiomhole tells FG

    Former Edo Governor, Mr. Adams Oshiomhole has called for a review of the Nigeria’s tax laws for an effective tax administration.

    Oshiomole, also a former President, Nigeria Labour Congress ( NLC ), made the call at the 26th Convocation Lecture of the Lagos State Polytechnic ( LASPOTECH ), Ikorodu.

    The lecture was entitled, “Crisis of Governance, Governance of Crisis: The Role of Education in Nibbling Governance Crisis in Nigeria.”

    He said the Federal Government must put necessary machinery in place to ensure that those who are expected to pay tax do so as and when due for improved infrastructural development of the country.

    Oshiomhole regretted that the only group of people who pay tax regularly are salary earners whose taxes were deducted at source.

    The former governor expressed disappointment that millions of taxable adults had devised means of evading tax.

    “How do we justify tax payment because most people say why do we pay tax when they will steal the money, what are they doing with it? Look at the roads they are bad, ” he said.

    According to him, such statement were mere excuses as the first step to be taken is to pay the tax to get moral and legal right to demand the judicious use of the money by the government.

    Oshiomhole urged the federal government to take a cue from the effective tax system of the Lagos State Government which had devised a means of identifying those who are expected to pay tax and ensure that they comply.

    “The developmental strides and successes recorded in Lagos State is a result of proper tax collection and judicious use of the fund.

    “Government must ensure that those who are at advantage pay their taxes and the fund generated should be used to deliver infrastructure for those who are at disadvantaged and everyone.

    “You can’t expect good roads, water and other social amenities  if you don’t pay tax;  once you pay then you can begin to probe the authorities and demand accountability for your money, ” he said.

    On the rights of the citizens, Oshiomhole noted that the logic of democracy enables citizens to have not only the weapon to vote once in four years, but to “police and interrogate” those they voted for in between the elections.

    He decried the poor state of the nation’s economy which he blamed on mismanagement of the country’s resources by the previous administration.

    “The manifestation of crisis in Nigeria include but not limited to corruption, failing public schools, security challenges , growing population , among others.

    “While it cannot be established that everybody is involved in corruption, its existence must be recognised by all and fought out of our system.”

    Oshiomhole noted that corruption had affected almost all the sectors of the country, adding that graft was was not limited to only those in government.

    According to him, the poor state of infrastructure and absence of basic facilities such as stable power supply, potable water, good roads and functional refineries are caused by corruption.

    On petrol subsidy, the ex-governor he said rather than subsidising petroleum products the government should handover the refineries to competent private investors who would make manage and run them.

    “Rather than to lament and agonize, what we need do is to organize and tackle those things that have brought us down as a nation.

    “As Nigerians we must recognise the problems confronting the country so as to diagnose and prescribe solutions to fix them.

    “The responsibility of leaders is so fix the country rather than join the citizens to lament.

    “When one notices that an environment is oppressive, what is expected of the victim is not to sit down to lament but to devise a way out of the problem,” he said.

    He, however, hailed President Muhammadu Buhari on the war against corruption, saying it recorded remarkable results.

    “The era of impunity of do it and nothing will happen is almost over in Nigeria; this is an era bringing every offender to book no matter their status.”

    Oshiomhole urged Nigerian students to be interested in governance, saying you are the future leaders.

    “You must interrogate power, organise yourself decently and ensure that your leaders are accountable just like the NANS during the military era who demand answers for every action.

    “Unlike the NANS of today who go mute on burning societal issues and are giving awards and giving plaques to government officials and other influential people, ” he said.

    In his remarks, Gov. Akinwunmi Ambode of Lagos State lauded the former governor for honouring the invitation of the state polytechnic and expresses optimism that he would do justice to the lecture.

    Ambode, represented by Dr Abdullateef Abdulakeem, the Commissioner for Home Affairs, described him as a ‘protagonist and an antagonist’.

    He said the role played by Oshiomhole in crisis management as a labour leader and governor negotiating potential issues with government and in government could not be over emphazised.

    The Rector of the institution, Mr Samuel Sogunro, noted that government was all about service delivery and once it fails at any level, the entire society would be affected, stressing the need for  transparency in governance.

    Sogunro said education in governance was key and if ignored could lead to crisis in governance because “education is the nation’s bulwark.”

    NAN

  • Govt uncovers 130,000 high net worth persons, firms underpaying tax

    Govt uncovers 130,000 high net worth persons, firms underpaying tax

    The Federal Government’s data mining efforts have identified a new batch of over 130,000 high networth individuals and companies with potential tax underpayments.

    The Minister of Finance, Mrs. Kemi Adeosun, broke the news yesterday while appearing on “Good Morning Nigeria”, a Nigerian Television Authority (NTA) programme.

    The minister said the data was being compiled by Project Lighthouse in preparation for the closure of the ongoing Voluntary Assets and Income Declaration Scheme (VAIDS) on March 31.

    Project Lighthouse is a unique project of the Federal Ministry of Finance that combines data from federal and state agencies and overseas countries.

    According to Mrs. Adeosun, “data have been received from a number of sources, including land registries of the governments of Lagos, Kaduna, Kano and Ogun states as well as the Federal Capital Territory”.

    “In addition, Nigeria has been able to request data from a number of nations, including traditional tax havens. The data have been received from a number of foreign jurisdictions under the exchange of information protocols.

    “Under the exchange of information protocols, this information relates to bank records and financial filings for tax purposes and is obtained from tax havens who are signatories to the information sharing agreements such as British Virgin Islands and Mauritius.”

    The data received from overseas countries will be used for taxation purposes only in line with the protocols governing the exchange of information

    “The sole interest of the Federal and State Governments in the use of the data is in raising tax revenues. There is absolutely no hidden agenda on the use of the data,” she added.

    Adeosun was however happy at what she called “the unprecedented level of cooperation between the Federal and State Governments”, which she said was a marked change from the past when the various arms of Government did not align their efforts.

    She  identified the common violations by non-compliant tax payers to include under-declaration of and non-declaration of income earned including income from Government contracts and overseas trading;  collection of Value Added Tax (VAT) which is not duly  remitted to Federal Inland Revenue Services (FIRS); charging of non-allowable personal expenses to company accounts particularly with reference to overseas school fees; inconsistency between income declared for tax purposes and the value of assets owned.

    She advised non-compliant tax payers to seek professional advice and to also consult relevant literature available from the tax authorities on tax rules.

    She underscored the Federal Government’s commitment to raising tax revenues which are considered essential to grow the economy and create jobs for Nigerians.

    She cited the fact that just N1 million could feed over 14,200 primary school children under the Homegrown School Feeding programme as well as creating many jobs in the agricultural sector.

    Once again, the finance minister ruled out any possibility of extending the VAIDS programme arguing that sufficient grace period had been given to tax payers to voluntarily and truthfully declare their assets and income which had not been declared previously.

    On the economy, she assured that the country was on the path of growth, noting that Nigeria exited recession in the second quarter of 2017, recording a growth of 0.72 per cent, further consolidating its recovery in the third and fourth quarters of last year, with growths of 1.40 per cent and 1.92 per cent, respectively.

    She said: “The Administration of President Muhammadu Buhari has laid the foundation for the repositioning of the economy by a series of reforms which are being sequenced to ensure maximum impact and benefits to Nigeria and the citizens.

    “These include huge investments in infrastructure and social welfare across the country, improved revenue mobilisation, rebuilding of foreign reserves and stabilisation of exchange rate.”

    She further noted that revenue mobilisation was potentially the master key to unlocking Nigeria’s huge growth potentials and funding the infrastructure programmes.

    In addition, the minister said the Federal Government would continue to create more fiscal space for reforms to enhance productivity and opportunity in the non-oil sector.

  • Tax: Govt targets property owners in highbrow areas

    Tax: Govt targets property owners in highbrow areas

    The Federal Government has extended its searchlight on tax evaders with net-worth properties in highbrow areas of major cities.

    The Federal Government on July 1, 2017 granted tax payers a nine-month grace to regularise their tax status under the Voluntary Assets and Income Declaration Scheme (VAIDS).

    Yesterday, a  source in the Presidency told reporters that the government through its data mining agency “Project Lighthouse” had received documents on property owners across the country from state governments.

    The first set of property owners that will come under scrutiny for tax compliance are owners of buildings in Maitama, Asokoro, Garki ll, Wuse ll in the Federal Capital Territory (FCT) and those on Banana Island and its environs Magodo, Lekki, Ikoyi in Lagos state.

    The source revealed that tax records and bank account details of these property owners are being reviewed by the team of “Project Lighthouse.”

    The source said “the extension of the searchlight on these property owners is not unconnected with Illicit Financial Flow (IFF). Most of these people are diverting their incomes to properties and are not paying taxes.”

    It was further learnt that some state governments in collaboration with the federal government have provided electronic searchable data base for individual and corporate property owners with the following key information: Name of owner, plot number, location and Certificate of Occupancy (CofO) number.

    It was also leant that the federal government is extending the searchlight to other northern states, the south east and the south-south regions.

    The decision to go after highbrow property owners the source said, is because “it has been observed that their life style does not reflect in their tax payment.”

    Last week, the federal government played to prosecute tax evaders from April 1. Under the VAIDS programme, state governments will be major beneficiaries of the programme because after the recovery, the money will go to the states, which is why the states are cooperating with the federal government on the scheme.

  • VAIDS: Fed Govt warns against fake tax officials

    VAIDS: Fed Govt warns against fake tax officials

    The Federal Government has raised the alarm over the activities of fake tax officials, who want to swindle unsuspecting public over the Voluntary Assets and Income Declaration Scheme (VAIDS).

    Minister of Finance Mrs. Kemi Adeosun yesterday advised tax payers to demand for written notice when they receive phone calls from tax officials.

    She gave this advice in response to the activities of some fake tax officials alleging to be officials of the Voluntary Assets and Income Declaration Scheme (VAIDS).

    A statement issued yesterday  by Special Adviser, Media and Communications to the minister Oluyinka Akintunde said: “My attention has been drawn to reports of some unidentified tax officials requesting for bank details and address of tax payers.

    “If you receive a phone call from someone claiming to be from the Tax Office, do not panic. Ask them to send you a written notice. Do not provide any details like your address or bank details,” she urged.

    The statement added that Kaduna State Governor Nasir el-Rufai and Mrs. Adeosun honoured a consistent tax-payer, Elder Lema Jibrin.

    It said: “Jibrin was honoured during the VAIDS sensitisation programme in Kaduna last Thursday.

    The governor noted that Jibrin had consistently paid tax to the government for 40 years.

     

  • Adeosun, Fowler for Kaduna tax amnesty symposium

    Adeosun, Fowler for Kaduna tax amnesty symposium

    The Minister of Finance, Mrs. Kemi Adeosun will on Thursday, March , lead a  Federal Government delegation to the Voluntary Assets and Income Declaration Scheme (VAIDS) stakeholders’ symposium in Kaduna State.

    The VAIDS stakeholders’ symposium is being hosted by the Kaduna State Government, and will be attended by the Executive Governor of Kaduna State, Mallam Nasir el-Rufai; Executive Chairman of the Federal Inland Revenue Service (FIRS), Babatunde Fowler members of the State Executive Council, members of the State House of Assembly, and traditional rulers.

    Also expected at the tax amnesty sensitisation forum, according to a statement issued by the FIRS, are business leaders, business owners and groups, tax advisers, captains of industries as well as professional and artisan bodies, among other strategic economic groupings within Kaduna State and environs.

    The statement noted that the VAIDS stakeholders’ symposium was aimed at promoting greater public understanding of the procedure for the tax amnesty scheme. “The one-day stakeholder engagement event by the Federal Internal Revenue Service and the Federal Ministry of Finance in collaboration with the Kaduna State government is aimed at forging mutually beneficial cooperation between the Government and diverse socio-economic interest groups for the success of the VAIDS scheme”, the government agency said.

  • MAN seeks company income tax reduction

    MAN seeks company income tax reduction

    •’Morocco’s admission into ECOWAS will further de-industrialise Nigeria’

    Manufacturers Association of Nigeria (MAN) President Dr. Frank Jacob Udemba has called on the Federal Government to review downwards company income tax (CIT) from 30 to about 20 per cent or less.

    This, the association said, will technically reflect on the prevailing operating environment and economic situation of the country.

    Udemba, who disclosed this in a chat with The Nation, said it would  assist in reducing poverty and stimulating the economy, especially in the manufacturing sector.

    The government, he advised, should expedite action on the resource-based industrialisation programme adopted by it through deliberate funding and creation of an enabling environment. HE stressed that it would fast-track the development of selected mineral resources through backward integration, especially those with high inter-industry linkages.

    Udemba urged the government to release some of the money dociled in the TSA to deposit money banks, explaining that the money could be re-invested or ploughed back into the economy to generate more income.

    Udemba re-echoed that Morocco is a member of the European Union (EU), stressing that the Federal Government should strongly resist its admission into ECOWAS as it would be a deliberate effort to de-industrialise the manufacturing sector in the region.

    He said: “The implication is that admitting Morocco, who is a member of the EU, will result in signing EPA through the back door. So, our members cannot compete favorably with them. This means that products from Europe would find their way easily into the regional market. If there is no ulterior motive, I see no reason why Morocco that is in North Africa would want to join ECOWAS.”

    According to Udemba, MAN and other members of the Organised Private Sector of Nigeria (OPSN) had unanimously rejected Morocco’s admission into ECOWAS as it would not help the region to develop.

    He pointed out that MAN, as the OPSN leading voice on trade-related matters, maintains that signing the EPA in its present form would adversely affect the manufacturing sector, dispel the industrialisation headways already made, and worsen the unemployment and poverty levels in Nigeria.

  • Tax efficiency and development

    Singapore, a city-state much smaller than Lagos State in landmass, is often touted and rightly so, as a marvel of rapid, yet sustainable economic development and advancement. Its success in transforming from a third to a first world country in a period less than 40 years has continued to impress, if not astound people.

    Singapore, before its transformation, faced the problem of overcrowding in the city, poor living conditions, a severe lack of infrastructure, and low technology, among others. Its current status as a thriving international business hub, characterized by a high standard of living, did not happen by chance. It was orchestrated through proactive and deliberate far-sighted planning.

    The problems that Singapore surmounted on the path to economic development and prosperity are some of the issues that Lagos State is today tackling as it aspires to transform into an efficiently run and more productive mega-city with vastly improved living conditions. A review of Singapore’s model reveals that, among other things, there was a systematic approach to the development of infrastructure.

    While Singapore’s experience shows clearly that infrastructure is central to socio-economic advancement, several studies by experts on other economies across the world have also identified a strong positive and even symbiotic link between infrastructure or infrastructure spending and growth. Any economy that wants to pursue sustainable growth must therefore invest in its infrastructure.

    Lagos State’s current drive at giving a massive boost to infrastructure development must therefore be welcomed as a leap in the right direction. Addressing the huge infrastructure deficit is crucial to unlocking the potential of the state and attaining the growth and development that we all desire. However, infrastructure development requires funding.

    If we agree that infrastructure development is that which must be done, then the required funding is equally that which must be secured. But the funds must be procured in a way that will ensure an effective and sustainable developmental programme.

    In advanced economies like Singapore’s, taxation constitutes a major source of government revenue and is an acceptable practice among their citizens. Taxation is also employed in other ways such as tariffs that protect local industries from foreign competition, checking undesirable practices and fostering inclusive development through asymmetric application.

    These economies also prove beyond doubt that taxation is a veritable source of funding for sustainable development, perhaps with its added advantage of empowering the citizens to demand more accountability from governments and as well constraining governments towards more transparency and efficient utilisation of funds. Apparently, making development everybody’s business fosters better growth.

    Tax to Gross Domestic Product (GDP) ratio (total tax collected as a percentage of the market value of all officially recognized final goods and services produced within a country in a given period), and the tax contribution to a country’s revenues are good indicators of efficient tax systems. In 2016, tax revenue in the European Union was 40 per cent of GDP (France 47 per cent, United Kingdom 35 per cent) and accounted for around 90 per cent of government revenues. Tax is usually about 26 per cent of GDP in the US and accounts for about 85 per cent of government revenue. In Singapore, it is about 14 per cent and 68 per cent, respectively.

    Nigeria’s tax to GDP ratio of six per cent clearly depicts the poor state of taxation in the country while at the same offering the opportunity to significantly increase government revenues.

    Lagos State’s internally generated revenue (IGR) for 2017 was N501billion, amounting to an average of N41.7billion per month.  Governor Akinwunmi Ambode of Lagos State has set an improvement target of N50billion per month for 2018. But even this ambitious plan will have to be scaled up progressively and substantially, considering the fact that the cost of fixing the state’s infrastructure deficit has been estimated at $50 billion.

    It is small wonder, therefore, that Lagos State is embracing taxation as a major source to secure the required revenues to fund the massive infrastructure gap in the state. With current low awareness and compliance rates, an estimated population of 24 million people (with more than seven million gainfully employed) and thriving businesses, Lagos can rely on taxation to provide the funds to drive its development.

    To get the full benefits though, taxation must be administered efficiently. This means there should be a high compliance rate by taxpayers and low administrative costs relative to the revenue collected. This is more easily achieved when the tax system is fair, simple, well organized and enforceable

    Achieving this efficiency requires a new approach to tax administration by the government. For instance, ramping up the awareness of citizens to the imperative of taxation, bringing a lot more people and businesses into the tax net (with demonstrable efforts at attaining total compliance of all eligible taxpayers), and applying some taxes asymmetrically such that the poor may not be as burdened as the rich will create a sense of fairness while increasing total funds accruable.

    The use of technology to improve the ease of remittance by citizens and businesses, the harmonization of certain taxes can also make taxation simpler for the taxpayer while improving the government’s ability at enforcement. Reviewing the tax rates that have become obsolete is also essential.

    Efficient taxation leaves a fair burden on all citizens and businesses while accruing substantial funds to the state’s coffers. It engenders more participation of citizens in governance which in turn forces more transparency and fiscal discipline on the government on spending and more rigour in the selection of projects to deploy funds to.

    The funds accruable from efficient taxation are also more predictable, unlike allocations from the federal government, which are subject to the vagaries of the crude oil market. Predictability helps to make proper and long term planning, which is essential for sustainable infrastructure development

    Efficient infrastructure supports economic growth as it facilitates timely delivery of information, goods and services, while accelerating the attainment of social objectives such as improved healthcare, higher educational standards and higher standards of living. It also attracts foreign direct investments from multinational corporations which act in synergy with the efforts of government while improving the tourism potential.

    Several infrastructure development projects have already been initiated by the Lagos State government. The entertainment and transport hub under construction at Oworonshoki is visible to all commuters that ply the Third Mainland Bridge as well as the improved lighting and security of that axis. Light rail construction is underway along with road constructions and rehabilitations while the exploitation of marine transport opportunities are in the works. The provision of pedestrian bridges, lay byes and street lifting have improved the safety and security of citizens and also decongested traffic.

    A lot still needs to be done to redress Nigeria’s infrastructure deficit. It is hoped that Lagos State can expedite the attainment of efficient tax administration so that the economic development Lagosians crave will be accelerated through well planned and proactive investments in infrastructure.

     

    • Adedeji, a tax and revenue expert lives, in Abuja.
  • 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.

  • Lagos flags off tax campaign at GTBank

    Lagos flags off tax campaign at GTBank

    Lagos State Governor, Akinwunmi Ambode has flagged off the electronic tax payment campaign of the state which will allow residents and citizens of Lagos State to pay their taxes directly to the coffers of the State Government. The flag-off campaign was kicked off at the bank’s Opebi branch, Lagos.

    Speaking at the flag-off ceremony, Ambode noted that this noble effort was implemented to help tax payers make direct deposits to the government coffers seamlessly.

    According to him, “The process in the payment of taxes has been simplified for the residents and citizens of Lagos State who are the direct beneficiaries of the productive utilization of taxes in the state. All the projects that have either been completed since the commencement of my administration or those that are underway have been done through taxes. Lagosians would henceforth be able to pay their taxes through GTBank branches; the mobile payment and internet banking platforms of all banks.

    Managing Director of Guaranty Trust Bank Plc, Segun Agbaje, said, “The e-tax payment campaign has shown the premium placed on electronic payment by the Lagos State Government and this would equally aid the financial inclusion program of the Central Bank of Nigeria.”

  • 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.