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Tag: taxpayers

  • Taxpayers database hits 35m, says JTB

    More Nigerians are paying taxes.

    The taxpayers’ data base has expanded from 20 million to 35 million, the Joint Tax Board (JTB) said yesterday through its Executive Secretary Oseni Elamah.

    Elamah said the feat was achieved as a result of the ongoing database consolidation of the JTB, an initiative being executed in collaboration with the Nigeria Inter Bank Settlement System (NIBSS).

    He said the taxpayers comprised individuals and corporate bodies.

    The JTB secretary said that the development showed that there was massive expansion of database, pointing out that one could imagine when that translated to actual taxes in cash.

    He said:  ”At the moment, we are trying to break them into classes of taxpayers and various jurisdictions where they reside, state by state.

    “Hopefully, by first week of January 2019, this information will be communicated to all the states and then we will ask them to file their reports for tax assessment and it is then, we will tell Nigerians, how many are teachers, artisans, entertainers among others.”

    Elamah disclosed that on the average, about 22 per cent growth in tax revenue had been recorded in both state revenue services and Federal Inland Revenue Service (FIRS), when compared to 2017.

    He added that this figure was collated as at third quarter; and by the end of last quarter, it would move to 30 per cent.

    According to him, at the close of the year today, 2018 will be one of the best results ever posted by the Federal Inland Revenue Service (FIRS) and most of the states.

    He stated that with the advent of the Tax Identification Number (TIN), and Bank Verification Number (BVN), the tax authorities were currently tackling incomes of taxpayers and ensuring they paid their taxes as at when due.

    He assured that the board would create more awareness in increase in voluntary compliance and also enhance the capacity of workers to be tax professionals.

    Elamah also commended the Executive Chairman of FIRS and the JTB chairmanc, Babatunde Fowler, for his support in achieving the feat within a short period of time.

  • States add three million taxpayers to national tax net, says FIRS boss

    States add three million taxpayers to national tax net, says FIRS boss

    State tax authorities have added three million new taxpayers from their jurisdictions into the national tax net for the first time in the country’s tax system history, Chairman of the Federal Internal Revenue Services (FIRS) Mr. Tunde Fowler said yesterday.
    He spoke in Abuja at the 136th meeting of the Joint Tax Board (JTB), where he reiterated that members of the JTB resolved at an earlier meeting to increase the number of individual taxpayers to 20 million.
    According to Fowler, “this is the first time in the history of the tax system when states will be adding this volume of taxpayers under nine months.”
    Kano State led other states with 900,000 new taxpayers to the national tax net, Fowler said.
    The FIRS boss noted that “in addressing challenges due to separate and distinct operational areas and tax jurisdictions of various tax authorities and revenue agencies, building a synergy among them provides a window of intervention towards an efficient and well-knitted tax system”.
    To make this possible, Fowler stated that members of the JTB, comprising federal and states’ internal revenue boards and other revenue generating agencies have “agreed and decided to pursue the synergy through a strategic collaboration framework in performing our functions”.
    The areas of collaboration, Fowler pointed out, include: identifying and locating taxpayers through sharing and exchange of information on taxpayers and exchange of taxpayer databases; conducting joint tax audit exercise by FIRS and State Internal Revenue Services (SIRSs) and others.

  • Hunt for new taxpayers

    In the federal government’s quest to achieve 99.9 per cent tax remittance compliance level, the Federal Inland Revenue Service (FIRS) has set machinery in motion to capture more eligible taxpayers into the tax net, reports Ibrahim Apekhade Yusuf

    For tax evaders who in the past successfully hoodwinked unsuspecting taxmen either by underreporting or not complying with the tax laws at all, it may no longer be business as usual because there is a new sheriff in town who is not ready to brook any nonsense.

    That much is what the new helmsman at the Federal Inland Revenue Service (FIRS), Mr. Babatunde Fowler has displayed in his body language so far.

    Perhaps as an indication of his commitment to the new task at hand, Fowler, who brings into his new job a lot of expertise and experience, has pledged to evolve a tax system that would make more people and organisations pay taxes so as to generate enough revenue to fund government commitments.

    Fowler, who spoke when he took over from the Acting Executive Chairman of FIRS, Sunday Ogungbesan, in Abuja, said he would take the organisation to a new height.

    An upbeat Fowler said: “My vision and mission is neither to alter the existing management organogram structure in FIRS nor lay-off management staff from their duty posts, but to take FIRS, as well as the nation’s tax system to an enviable height.

    “This we cannot achieve all alone without a robust partnership and collaboration of all stakeholders within and outside the system. We must build a synergy for a healthy exchange of information between FIRS and SBIR.

    “This synergy will produce the best form of revenue generation in the FIRS and the states in general, as well as ensuring that over-dependency on oil revenue becomes a thing of the past,” Fowler assured.

    Part of Fowler’s agenda at FIRS is to capture more taxpayers in the tax net and increase the 1,189,722 corporate and individual taxpayers to a higher number in the coming weeks.

    Besides, the current management of FIRS under Fowler is expected to focus on improving structures, strengthening processes and automating core functions that support tax revenue collection.

    New tax drive

    In federal government’s determination to boost tax revenue, one area it hopes to revisit is to increase number of taxpayers across the country.

    According to the government, the requisite measures needed to actualise this feat have been made possible in partnership with various states’ boards of internal revenue service, adding that enforcement of the collection of taxes would henceforth be undertaken by the federal and state governments.

    Fowler, who reiterated his commitment to raise the revenue portfolio of FIRS at the 132nd meeting of the Joint Tax Board in Abuja, stated that the federal government’s target was to ensure that it achieved at least 99.9 per cent tax remittance compliance level.

    “This means that every individual at the state level and every corporate organisation at the federal is taxed and pays the appropriate amount,” he said.

    On how the agency would go about this, Fowler said, “We are going to exchange information with state boards of internal revenue so that we have all the information in a database. We’ve given them out already in case there is any company within their states that they don’t currently have on their database. That is step number one.

    “So, immediately, we should have a growth in taxpayers both at the federal and state levels within one week.”

    On the volume of tax remittance to expect, the FIR boss said: “Let me not put a naira figure on it. But I can tell you in terms of percentages. Based on information given by the FIRS, they did say that they had about 450,000 corporate organisations, out of which one-third was paying.”

    What the tax laws says

    The Nigerian Personal Income Tax Act states that employers are required to file annual returns of all remuneration paid to their employees and taxes deducted and remitted to the tax authorities on or before 31 January every year. Failure to do so carries a maximum penalty of N500, 000 for the employer and N50, 000 for individuals.

    In addition, employers must remit Pay-As-You-Earn (PAYE) tax each month for each employee to the relevant state internal revenue services, on or before the 10th day following the month in which salary was paid.

    Besides, employers and employees are each required to contribute 10% and 8% respectively of their employee’s monthly remuneration to the Nigeria’s contributory Pension Scheme. There are also other statutory payments, such as the Employee Compensation Scheme (formerly known as the Workmen Compensation Act), Development Levy, National Housing Fund, Industrial Training Fund, just to name a few.

    Agonies of overtaxed citizens

    Much as the FIRS is determined to boost its revenue through tax collection the belief is that the agency along with other allied organisations both the federal and state levels are overstretching their limit in terms of tax collection.

    One of such individual who is not comfortable with the renewed tax aggression is Mr. Remi Ogunmefun, Director General, Manufacturers Association of Nigeria (MAN), who speaks the minds of his pressure group at MAN.

    Speaking at a public forum in Lagos, the MAN boss described as scandalous the unprecedented level of taxes levied against manufacturing companies operating in the country, a development, he said, is a disincentive to business.

    “Manufacturers are already overburdened by a lot of challenges including limited infrastructure, which is why it is unthinkable that they are continuously being overstretched,” he said.

    Specifically, he said: “I can tell you without mincing words that many manufacturing companies in the country today pay one form of levy or the other to at least 25 agencies including federal, state and local government respectively. This is killing. How can manufacturers survive in this kind of hostile environment, it is impossible.”

    Expatiating, he said: “Manufacturers are groaning under severe multiple taxation that adds to the cost of business and disrupts the manufacturing chain. This is not fair at all.”

    The way forward, he said, is for government at all levels to streamline these taxes in order to encourage the growth of companies.

    “Many manufacturing plants we have today are no longer in business because of a number of factors, part of which includes poor operating environment and the issue of multiple taxations. There is an urgent need on the part of government to address this ugly situation,” he stressed.

    Innovation in tax administration

    Worried that taxpayers in the country were mainly salary earners and few people in the business community, the various revenue agencies have over time tried various initiatives to bring more Nigerians under the tax net.

    One of such initiatives was the recently introduced Taxpayers Identification Number (TIN) which the Joint Tax Board (JTB) believes is a veritable tool in this regard and as such has renewed its campaign to create awareness for the electronic device.

    First muted in 2008, the Federal Inland Revenue Service (FIRS) and the Inland Revenue Boards of the 36 states in the federation hinted of their plan to introduce a new taxpayers’ identification number, tagged Unique Tax Identification Number (U-TIN) in 2009. The board then said U-TIN was an electronic system of tax registration which will be unique to individual taxpayers nationwide. Justifying the new initiative, the board cited Section 8 (q) of the Federal Inland Revenue Service (Establishment) Act, which provides the legal back-up for taxpayer identification numbers.

    The law provides that “the service shall issue taxpayer identification number to every taxable person in Nigeria in collaboration with States Board of Internal Revenue and Local Government Councils.

    Purpose of TIN

    Most government agencies and financial institutions across the country insist on the presentation of TIN and Tax Clearance Certificates (TCC) as part of the eligibility requirements for any individual or corporations doing business with them. They are required for government loans, foreign exchange transaction, issuance of Certificate of Occupancy (C of O), trade licenses, government contracts, import and export licenses, vehicles registration and international passports. They are also required for allocation of market stalls, approval of land and building plans, appointment or election into public offices and registration companies and business names among other things.

    Using the new electronic taxpayer registration system, JTB would ensure automation of tax activities in the country and eradicate multiple taxations in the country.  It will also boost information sharing between tax administrators and various institutions in the country saying the use of TIN is the easiest way to create a tax-friendly environment in the country.

    How companies can be tax-compliant

    One way to get companies to be tax-compliant is to ensure that they have robust, automated payroll systems and processes in place so that they can more easily comply with the demands of an increasingly tough tax regime in the country.

    That’s according to Magnus Nmonwu, Regional Director for Sage West Africa, who says that a hardline attitude to non-compliance from the federal and state tax authorities means that companies must get all their processes and paperwork in order to avoid tax troubles in the months to come.

    “Nigeria’s tax authorities are taking a zero-tolerance approach to non-payment of tax or incorrect remittances of taxes to the government, whether the reason is a deliberate evasion or an accidental oversight. With companies in Nigeria coming under more scrutiny for their tax affairs, it is essential to put in place systems and processes that help you to easily comply with tax regulations.”

    He further notes that one common reason some companies in Nigeria struggle to meet these tax obligations and deadlines is that they don’t have formal business systems in place to enable accurate recordkeeping, precise calculations and deductions, and automated preparation and submissions of these statutory returns to the relevant tax authorities or government agencies when due.

    Against the backdrop of growing regulatory complexity, Nmonwu argues matter-of-factly that organisations need to realise that spreadsheets and other manual methods are no longer sufficient to meet their needs.

    To comply, companies need to put in place solutions that streamline capturing of transactions, automate payroll calculations and bring visibility of the business. Such solutions also make it simpler to keep track of annual changes to tax regulations that impact on payroll tax calculations and various changes in legislation, says Nmonwu.

    Call for tax amnesty

    Globally, the popular fad now is to encourage voluntary tax collection.

    More and more tax administrators are coming up with diverse products to raise government revenues to meet daunting challenges.

    In the view of analyst, in Nigeria and much of the frontier markets voluntary tax compliance is still a mirage and special efforts needs to be employed to curb it.

    Whereas in developed nations taxpayers remit voluntarily, allowing the tax administrators time and space to develop new tax types such as carbon tax, green gas tax amongst others, but one innovation that stands out from this pack, even in developed countries, remains tax amnesty.

    Tax amnesty is defined as a waiver or reduction and sometimes removal of penalties in back taxes to encourage defaulting taxpayers to pay what they owe within a specified window.

    According to Atanda Mikail, a tax consultant, majority of eligible taxpayers in Nigeria rarely remit their taxes and it is crucial we find a common ground to achieve the objective of the government to raise funds from taxes through some ingenious means that works with our cultural and economic landscape.

    But can the FIRS really achieve its ambitious target of recording over 99.9 per cent tax remittance compliance level?

    Time will tell.

  • NGO lifts Bayelsa taxpayers

    The coming on board of the Tax Justice Advocacy and Governance Platform (TJGP) has restored the hope of shop owners and the business community in Bayelsa State. The state has serious tax issues. In fact, the increasing quest to generate revenue internally to augment lean resources from the Federal Government has placed additional burden on the shoulders of taxpayers.

    Artisans, shop owners and all categories of businesses including drivers of commercial vehicles especially in Yenagoa, the state capital are not free from the wrath of tax collectors. The main problem bugging the tax system is multiple taxation. Different ministries collect the same taxes from people.

    But the TJGP said it had come to address all the tax injustices in the state. The stae Coordinator, TJGP, Princes Elizabeth Egbe, and the group’s Secretary, Mr. Torki Dauseye, held a forum recently in Yenagoa to sensitise the people on their rights.

    Egbe said the platform was established to increase awareness among citizens on tax justice; promote fair, progressive and transparent tax system and administration in the state through improved stakeholders’ advocacy.

    She explained that the platform would undertake research to determine the tax burden and types of taxes implemented in the state which would facilitate evidence-based campaigns against all forms of harmful tax practices that undermine human rights and government ability to generate maximum tax revenue.

    While saying that it is a civic responsiblity for every citizen to pay tax, she insisted that it should be done in a way that protects the rights of the people.

    She said: “The tendency for the government to pursue the raising of revenue as much as possible from taxes in a manner that ignores the rights of citizens is therefore a looming possibility, especially as power has the ability to corrupt if not checked.

    “When taxation becomes strictly revenue-driven, the tendency for injustice becomes higher. Tax justice proposes that every citizen pay all the taxes they are expected to pay according to their ability to the appropriate authorities and jurisdiction with ease and convenience in a timely manner”.

    She advocated an inclusive tax system in the state to promote small and medium enterprises insisting that the platforn seeks a balance between the obligations and the rights of the state to collect taxes and the duties of citizens to pay taxes.

    She said a survey by the platform found some injustices in the system. She identified some of them as multiple rates, taxes, levies on lower ladder players especially women; tacit approval of extortion, undocumented collections; corruption and collusion by tax officials and non-remittance of collected taxes to appropriate authorities.

    In its quest for tax justice, she said the platform visited Ministry of Finance, board of internal revenue, Association of Local Government of Nigeria (ALGON), Nigerian Bar Association (NBA) and the traders and media unions.

     

  • Reward for voluntary taxpayers

    Reward for voluntary taxpayers

    • A good idea if well-executed

    The Federal Inland Revenue Service’s (FIRS) newly inaugurated leadership has shown early, its desire to broaden its tax dragnet. This is a welcome development at a period of drastic reduction in oil revenue for the nation due to drop in oil prices. And to achieve this goal, the service is reportedly planning incentives for firms and individuals that voluntarily come forward to pay their taxes.

    Samuel Ogungbesan, newly appointed Acting Executive Chairman, FIRS at a media parley in Abuja a few days after assuming office said: “The duty of every Nigerian at the 1st of January is to go to the tax office and pick a form and assess himself. We are undergoing a self-assessment tax regime at the moment. There is a continuum we call compliance continuum. These are those who are complying, and there are those at the extreme end who, no matter what action you take, no matter the intervention, no matter the encouragement, they still will not comply. And in-between, there is a hybrid – a mix.’’ He continued: ‘‘so, in between, we have to develop a strategy. So, for those who are complying, our posture is that we will continue to support them; we may even go to the point of giving them concession such as one per cent bonus for complying. They need to be recognised as examples for tax administration. For those who need help and are not able to comply because they don’t understand, we will support them with tax education and assistance in any form until we get to the extreme ones.”

    Nigerians no doubt have a particularly endemic habit of tax evasion. And this is rampant in the largely uncoordinated informal sector where people make millions everyday without bothering to give back to government from what they have made. Yet most organised countries fund most of their spending from taxes. Nigeria should not be an exception if she truly desires to meet up with her financial obligations to self and to the citizenry in the face of dwindling oil fortune.

    This is why we are happy that Ogungbesan is already planning to create a bonus regime for voluntary taxpayers and also begin an engagement process with all taxpayers to secure confidence rather than embark on unyielding pursuit of the old regime of closing businesses and taking tax evaders to court. The new FIRS order should also see how to make the best of the existing tax initiatives, including the Tax Identification Number System and the voluntary tax assessment system.

    We strongly believe that the FIRS as a money generating institution can still do more for the country by injecting significant transparency into its operations. We are particularly bothered that the service could still not effectively address the challenges of multiplicity of taxation on institutions and the people in general. Perhaps, Nigeria remains the only country where such a thing is happening simply because taxation process is not well streamlined between federal and state governments.

    More importantly, the service yearly declares trillions of naira as taxes collected from institutions and individuals. Yet, the impact of the collected taxes is not felt, thereby creating doubts in the minds of the people regarding the whole essence of taxation. This is without prejudice to some state governments that have really deployed taxes collected from their jurisdictions to better use.

    The new initiatives of FIRS are good but, more people and institutions would be encouraged to voluntarily pay taxes if accountability is accorded a pride of place; and when money collected as taxes is deployed to the benefit of the greatest number of Nigerians.

  • How to woo taxpayers in Jos

    The Plateau State government has found new ways to convince the people that paying tax is better than waiting for dwindling allocations from Abuja. Staff of the government hit the streets, showed up at markets, offices, even homes, telling everyone in spectacular fashion that the state’s cash hopes lie in tax money, not revenue allocation. Samuel Pam, chairman of the state internal revenue service, led the campaign team.

    The tax campaign mascot was also unveiled in the carnival-like drive. The team looked colourful in lemon-green T-shirts and matching caps.

    As the revenue staff filed out of their offices into the streets, they were armed with the tax campaign leaflets and handbills which they distribute to residents especially motorists, passersby, women traders and shop owners during the road walk that lasted four hours. The road walk took the revenue staff to the major business streets of Jos like Ahmadu Below way, Old Bukuru Park, Tafawa Balewa Street, Kashim Ibrahim Street, Rwang Pam Street, Bank Road, etc. while giving reasons for the campaign, Pam said: “Tax is the major source of government revenue after the monthly statutory allocation from the federation account. The federation account itself is based on crude oil. In recent times the share of the monthly allocation has continued to dwindle steadily based on what is happening at the international oil market. The lesson from the dwindling federal revenue is for every state to look inward for revenue. In other words, states cannot continued to depend on the federal allocation because it is not a dependable source of revenue. So the only alternative source of revenue for a state like Plateau is our internal revenue. Incidentally, what is happening in the federal revenue is equally affecting our internal revenue negatively. For instance, if you talk of Pay As You Earn (PAYE) which is a major source of our internal revenue, is badly affected by the dwindling federal revenue because when civil servants are not payed salaries which also comes from the federal revenue, it will be difficult to collect PAYE because it is only when salaries are paid that you talk of PAYE.So we have to look beyond the formal revenue sector and try to mope up what you can get from the informal sector like the shop owners, traders etc. But to succeed in these area we have to sensitize these categories of tax payers. We have to create the understanding between tax payers and government. We used the road show to educate tax payers on their responsibility to government.

    According to Mr. Pam, “We also need to showcase how government has been able to apply the tax collected do far, we see tax payment as a social contract between government and its citizens. Government has to be accountable to tax payers by prudent utilisation of the tax collected, citizens of the state who enjoy the social services provided by government must be able to fulfil their own part of the social contract by paying their tax promptly all the time. As the head of the tax collector in the state, I can confirm that tax payers fund are been effectively utilised by the state government through the massive infrastructural development. The new road network in the urban and rural centers across the state, water treatment and supply has improved tremendously, public school structures are looking new and solid etc. I can assure all tax payers that their efforts in tax payment are not in vain, they should keep it up and even improve on it. That is all we are asking for because Plateau has no other source of revenue apart from these taxes”.