FINANCE ACT 2020 has been signed into law.
FINANCE ACT 2020
The Finance Bill 2020 has been signed into law. The new law introduces over 80 amendments to 14 different laws and takes effect from 1st January 2021.
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Category: Press Release
COVID-19:MESSAGE FROM THE Executive Chairman FIRS TO TAXPAYERS
COVID-19:MESSAGE FROM THE EC FIRS TO TAXPAYERS
Dear Taxpayers
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As you are all aware, Nigeria has so far recorded more than thirty cases of the COVID-19 (Coronavirus). This global pandemic is already impacting social, economic and other activities across the world. In Nigeria, the Federal Government through its relevant agencies such as the Federal Ministry of Health and the National Centre for Disease Control (NCDC) is doing all it can to contain and minimize the spread of the virus in Nigeria and we are confident their efforts would be successful.
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On our part at FIRS, we have launched our business continuity plan (BCP), and we are taking measures to ensure the safety and well-being of our staff, taxpayers, stakeholders and visitors.
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As our key stakeholder, please note that while our offices remain open, we have taken concrete steps to support you during these challenging times, whilst minimizing any disruption to tax administration and taxpayer services. To this end, we wish to inform you that:
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(a)The FIRS has various e-platforms for filing of tax returns, payment of taxes and application for Tax Clearance Certificates and we urge taxpayers to, as much as possible, utilise such e-platforms. This will not only relieve taxpayers of the need to physically visit tax offices for this purpose but also more efficient and timely delivery.
(b)Taxpayers are at liberty to engage with the FIRS, via electronic mail (e-mail), in line with the Finance Act, 2020. Taxpayers can also contact us on the FIRS Contact Centre on 0909 74444444 or 0909 71111111. If you still require visiting any of our offices, we ask that you adhere strictly to globally recommended social distancing rules and be aware that the following general hygiene practices will be applied:
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i. All meetings with taxpayers are limited to no more than ten (10) people at a time.
ii. All FIRS offices are being equipped with infrared temperature measuring devices. Staff, taxpayers and all visitors entering our premises will be screened with a temperature scanner at all entry points. Persons with temperatures higher than 37.5°C may be denied access to the facility. Please note that the screening will be conducted by trained personnel and without physical contact.
iii. All FIRS offices have been equipped with hand sanitizers, and we expect taxpayers to make use of these ahead of engaging with our staff. We also have hand washing liquids and soaps in our restrooms.
iv. Additional procedures have been put in place and will be utilized to ensure that all our offices and work surfaces are regularly cleaned and sanitized, using appropriate disinfectants recommended by the NCDC and the World Health Organization.
v. Our staff have also been provided with additional protective gear such as gloves and face masks where required.Â
The Federal Government and the Central Bank of Nigeria have also issued various palliatives to cushion the effect of COVID-19 on the economy. The FIRS will require full cooperation and support from all our taxpayers in order to collect revenue that Government will utilise to continue to provide infrastructure, health services and other palliatives to all Nigerians.
On our part, we will continue to work with relevant agencies of Government to provide necessary reliefs to taxpayers to lessen the impact of this pandemic on businesses and other economic activities by taxpayers. To this end, we are offering the following palliatives to our taxpayers:
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1 The FIRS is extending the timeline for filing of value added tax and withholding tax to the last working day of the month, following the month of deduction.
2 The due date for filing Companies Income Tax returns is hereby extended by one month.
3 Tax payers already registered on e-filing platform are at liberty to submit all returns via efiling.firs.gov.ng, alternatively please submit your returns to:Â For:
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a) Large taxpayers â oil & gas (Upstream) = ltoupstream@firs.gov.ng
b) Large taxpayers â oil & gas (Downstream) = ltodownstream@firs.gov.ng
c) Large taxpayers â oil & gas (Servicing) = ltoservicing@firs.gov.ng
d) Large taxpayers â non oil (financial) = ltononoilfinancial@firs.gov.ng
e) Large taxpayers â non oil (Manufacturing) = ltononoilmanufacturing@firs.gov.ng
 f) Large taxpayers â Abuja= ltoabuja@firs.gov.ng
g) Large taxpayers â Kano= ltokano@firs.gov.ng
h) large taxpayers â Ibadan= ltoibadan@firs.gov.ng
i) Large taxpayers â Port Harcourt= ltoportharcourt@firs.gov.ng
j) All Medium taxpayers = mto@firs.gov.ng
k) All Small and Micro taxpayers = msto@firs.gov.ng
l) All Government Business taxpayers = mto@firs.gov.ng
j) All Stamp Duty taxpayers = stampduty@firs.gov.ng
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â4 Taxpayers who wish to file their returns with the FIRS without an audited account can file same, provided that the relevant audited accounts are submitted unfailingly within two months after the revised due date of filing.
5 The FIRS also intend to publish on its website, information requests for desk reviews and tax audits, and create a portal where such information can be uploaded to our database for online access review.
The Management and Board of the FIRS will continue to monitor the situation and abide by the federal, state and local authoritiesâ instructions on COVID-19. Be rest assured that we will constantly update you on developments, that may affect your businesses, well-being and the Service. In addition, where the need arises, appropriate action would be taken by Management if the situation portends immediate threat to you, our staff and visitors to our offices.
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The humankind has surmounted various challenges throughout history, and we believe that COVID-19 is not an exception. As we draw strength and hope from each other, let us continue to pray for the safety of all Health Workers, Doctors and Scientists, trying to develop a vaccine for this virus. The Management and Board of the FIRS is confident that we will emerge stronger as a Race from this experience.
I pray for your safety and that of your loved ones, and trust that you will be vigilant and keep yourself, family members and friends safe.
Thank you all
Recent Press Releases
A BRIEF ON STAMP DUTIES AT THE INAUGURATION OF COMMITTEE
A BRIEF ON STAMP DUTIES AT THE INAUGURATION OF THE INTER-MINISTERIAL COMMITTEE ON THE AUDIT & RECOVERY OF STAMP DUTIES AND LAUNCH OF FIRS ADHESIVE STAMP Title
Mr. Muhammad Nami, Executive Chairman
Federal Inland Revenue Service
JUNE, 2020
His Excellency, the President of the Federal Republic of Nigeria, ably represented by the Secretary to the Government of the Federation
His Excellency, the President of the Senate
His Excellency, Speaker, House of Representatives
The Honourable Attorney General of the Federation & Minister of Justice
The Honourable Minister of Finance, Budget and National Planning
Members of the National Assembly
Board Members, Federal Inland Revenue Service
Distinguished Guests
Ladies and Gentlemen
Introduction
It is my honour and privilege to make this presentation at this auspicious occasion, which brings together important stakeholders in the public and private sectors to deliberate on the audit and recovery of stamp duties and launch of the Federal Inland Revenue Service (FIRS) adhesive stamps.
I sincerely thank all our stakeholders and partners for being a part of this epoch making event.
Background
The existence of Stamp Duty in Nigeria predates independence going by the 1st commencement date of 1st April 1939. (i.e. Ordinance 41 of 1939 and subsequent amendments).
Stamp Duties administration is governed by the Stamp Duties Act, CAP S8, LFN 2004 (as amended).
As the manner of business transactions continues to evolve and change pattern, so also the law on Stamp Duties. The Stamp Duties Act has therefore undergone several amendments over the years up to the Finance Act of 2019. The most recent amendment recognizes technology, economic realities, e-commerce and cross border transactions.
Stamp Duty is essentially a duty chargeable on both physical and electronic instruments. The Stamp Duties Act defines duty to mean âany stamp duty for the time being chargeable under any other Act and also includes any fee chargeable hereunder“.
The stamp is used to denote a dutiable instrument either electronically, use of an adhesive stamp or inked with a block die in acknowledgement for duty paid.Â
Section 2 of the Stamp Duties Act defined âstamp” as âan impressed pattern or mark by means of an engraved or inked block die as an adhesive stamp or an electronic stamp or an electronic acknowledgement for denoting any duty or fee“.
Furthermore, as the world becomes more global, COVID 19 has further limited physical interactions, electronic payments acknowledgement of duties at a time like this is a must.
2019 Amendments to the Stamp Duties Act
The Finance Act 2019 (Sections 52-56) amendment to the Stamp Duties Act has clearly defined responsibilities for the administration of Stamp duties in Nigeria and jurisdiction of participating taxing authorities. The FA 2019 Act has laid to rest;
- ambiguities as to parties responsible for âthe imposition of stamp duty”;
- With Finance Act, 2019, FIRS is the sole competent tax authority to assess, collect and account for stamp duty in Nigeria.
- definition of stamp duty to mean an evidence or acknowledgement of the payment of the appropriate fee, and
- the fact that a stamp duty could take the form of an engraved, inked block die, an electronic Stamp or an electronic acknowledgement for denoting any duty or fee.
The Schedule to the Stamp Duties Act contains a list of dutiable and exempted items. The dutiable items have been expanded under the FA 2019 to include electronic receipt or electronic transfer for money deposited in any bank; It further makes an upward review of duty from N4.00 to N50.00 on receipts or transfer between MDBs customers relating to N10,000 and above per transaction.
Chargeable Transactions
| Fixed Duty Instruments: | Ad-Valorem Instruments: |
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Stamp Duty Administration
Stamp duties is basically charged in two forms, either ad valorem; where duty payable is a percentage of the consideration on an instrument or a fixed sum irrespective of the consideration on dutiable instrument or document.
The Stamp Duty Commissioner is appointed by the relevant tax authority (either Federal or State) as prescribed by jurisdictional authority to administer the Act.
His/her functions are to administer the provision of the Act and to supervise the Stamp Duties office; adjudicating/assessment, stamping, imposition of penalties where necessary, ensuring the security of stamped instruments, and accounting for duties collected.
Relevant Taxing Authority
The Federal Inland Revenue Service, by section 4(1) of the Stamp Duties Act, is the only competent authority to impose, charge and collect Stamp Duties upon instruments specified in the Schedule of the Stamp duties Act where such duties relate to matters between a company and an individual, group or body of individuals.Â
The relevant tax authority in a State, by section 4(2) of the Stamp Duties Act, is empowered to collect Stamp duties on instruments executed by individuals at such rate as may be determined by the Act.
Previously, the FIRS collected Stamp duties on instruments executed by an individual resident in the Federal Capital Territory. However, this has ceased upon the creation of the FCT-Internal Revenue Service.
Review of Stamp Duties Collection Performance
- Total Stamp Duty collection for Jan – Dec 2019 was N18billion.
- Total collection by FIRS from January 2020 to June 29th 2020 is as follows:
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| Â | N |
| Stamp duties remitted by Money Deposit Banks (MDBs) | 20.00bn |
| Stamp duties revenue from stamping of instruments | 7.90bn |
| Stamp duties revenue from stamping of instruments | 39.00bn |
| Total stamp duty remitted into Federation Account from January, 2020 â May, 2020 | 66.00bn |
- ââThis significant leap arose from the dynamism triggered by Finance Act 2019, sums warehoused by the CBN in respect of prior years, deployment of technology and stakeholders collaboration, etc.
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- The collection performance of Stamp Duties hitherto witnessed is a tip of the iceberg compared to its potentials. The amendment and effective implementation of the Stamp Duty Act, simplified administrative processes plus the audit and recovery exercise will raise the bar significantly.
- The dependence on postage stamps for denoting Stamp Duties is one of the factors accounting for low collection performance in the past.
- The introduction of the FIRS Stamp Duties Adhesive Stamp will, among other things:
- plug the revenue sink-hole;
- enable proper accountability and transparency;
- simplify administration of Stamp Duties; and
- reduce disputes.
- The FIRS is prepared to reposition Stamp Duties as the next major revenue source for Nigeria.
- As revenue from oil and gas continues to dwindle due to global fall in demand and price, indirect taxes such as stamp duty remain the viable and sustainable alternative revenue source for funding budgetary requirements by the Nigerian Government.
- Let us use this gathering, as partners and stakeholders in the development of our dear country, to refocus our efforts on developing a tax system that works for all.
On behalf of the Board, Management and staff of the FIRS, I register my sincere appreciation to the leadership of the National Assembly for their support and encouragement to the Service.
My special thanks goes to the Honourable Minister of Finance, Budget and National Planning for always being there for the Service.
The FIRS is open to engagement with all stakeholders for the purposes of repositioning the tax system for the benefit of our dear country.
We therefore invite all and sundry to come join hands with us in the task of building a virile tax system that will be a pride of all.
Conclusion
Let me leave with us, the words of a former American President, Benjamin Franklin who said, and I quote âIn this world nothing can be said to be certain except death and taxes”
Always remember that âit pays to pay your tax”.â
THANK YOU.â
Recent Press Releases
House rent agreement, C of O, others must carry stamp duty, says FIRS
House rent agreement, C of O, others must carry stamp duty, says FIRS
The Federal Inland Revenue Service (FIRS) has alerted Nigerians and others resident in the country to make sure that documents pertaining to rent or lease agreements for their homes or offices, Certificate of Occupancy (C of O) as well as a list of other common business-related transaction instruments are subject to authentication with the new FIRS Adhesive Stamp duty.
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This is necessary in order to give these instruments the force of law and make them legally binding on all parties involved in such transactions. The FIRS issued the alert on Thursday in a statement by Director, Communications and Liaison Department, FIRS, Abdullahi Ismaila Ahmad.
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The new FIRS Adhesive Stamp Duty was launched in Abuja on Tuesday June 30, 2020, at the official inauguration of the Inter-Ministerial Committee on Audit and Recovery of Back Years Stamp Duties.
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In the statement, Executive Director, FIRS, Mr. Muhammad Nami, stated that âchargeable transactions under the Stamp Duties Act as amended in the Finance Act 2019 are in two categories â Fixed Duty Instruments and Ad-Valorem Instruments.â
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Mr. Nami continued: âThe following are the chargeable transactions in the Fixed Duty Instruments category:Â Power of Attorney (PoA); Certificate of Occupancy (C of O); Proxy form; Appointment of Receiver; Memorandum of Understanding (MoU); Joint Venture Agreements (JVA); Guarantorâs form; and Ordinary Agreements Receipts.â
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âWhile ad-Valorem Instruments chargeable under the Stamp Duties Act are Deed of Assignment; Sales Agreement; Legal Mortgage or Debentures; Tenancy or Lease Agreements; Insurance Policies; Contract Agreements; Vending Agreement; Promissory Notes; Charter-Party; and Contract Notes.
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âStamp duty is basically charged in two forms, either ad valorem where duty payable is a percentage of the consideration on an instrument or a fixed sum irrespective of the consideration on dutiable instrument or document.âÂ
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âThe FIRS enjoins members of the public to make sure that any of the above-listed instruments they give or receive in the course of their business or official transactions have the new FIRS Adhesive Stamp Duty affixed or stamped on them to authenticate or legalize such Instruments,â Mr. Nami stressed.
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The new FIRS Adhesive Stamp Duty is available in all FIRS offices nationwide.
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Abdullahi Ismaila Ahmad
Director, Communications and Liaison DepartmentÂ
Federal Inland Revenue ServiceÂ
July 2, 2020â
Recent Press Releases
FIRS AEOI-CRS (automatic exchange of information) IS LIVE
FIRS AEOI-CRS IS LIVE
Federal Inland Revenue Service (FIRS) has launched an AEOI-CRS (automatic exchange of information-common reporting standard) portal for the use of financial institutions in the country.
Executive Chairman, FIRS, Muhammad Nami called on reporting financial institutions under the Income Tax (Common Reporting Standard) Regulations 2019 to enroll on the portal:
âThe Automatic Exchange of Information-Common Reporting Standard (AEOI-CRS) system portal is currently live, open and active. Consequently, all Reporting Financial Institutions (Commercial Banks, Merchant Banks, Discount Houses, Mortgage and Development Banks, Insurance and Life Assurance Companies, Investment Advisers, Trustees, Asset Management Companies, Issuing Houses, Brokers/Dealers, etc.) are invited to enroll on the AEOI-CRS portal.
âEach reporting Financial Institution (FI) is required to designate an appropriate officer as Primary User (PU).
âThe PU is the custodian of the FI’s login details on the portal. A letter signed by the Chief Executive Officer of the FI introducing the PU to the FIRS is required as part of the enrolment process.
âIn order to enroll as a PU of an FI and have access to related AEOI-CRS documents, please visit the FIRS website and navigate the menu tab on Automatic Exchange of Information.
âPlease do this only if relevant contact details have been forwarded to the FIRS. FIs are to further take notice that CRS reports for 2019 are due not later than 30th September 2020,
âFor further information, send enquiries to aeoi.enquiries@firs.gov.ng or sanya.gbonjubola@firs.gov.ng.”â
Recent Press Releases
FIRS extends tax debt payments to August 31st
FIRS extends tax debt payments to August 31st
The Federal Inland Revenue Service (FIRS) has further extended the closing date of its waiver of penalty and interest window on tax debts owed by individuals and businesses from June 30, 2020 to August 31st, 2020.
 Executive Chairman, FIRS, Mr. Muhammad Nami, disclosed this latest extension in a statement issued on Wednesday by Director, Communications and Liaison Department, FIRS, Abdullahi Ismaila Ahmad.
 Mr. Nami stated that the extension is a follow up to a number of palliative measures devised by the FIRS to cushion the effects of the COVID-19 pandemic on the Nigerian economy in order to support tax-paying individuals and business entities in the country.
 According to Mr. Nami, the latest extension applies to âTax Audit, Tax Investigation and Desk review assessments, Approved instalment payment plans under Voluntary Assets and Income Declaration Scheme (VAIDS) yet to be fully liquidated.”
 Mr. Nami added: âTaxpayers are advised to note that there will be no further extension of this palliative measure. Tax debtors are therefore enjoined to liquidate their outstanding tax liabilities on or before 31st August, 2020 in order to enjoy waiver of accumulated penalties and interests.”
 He also advised all concerned individuals and businesses to contact their respective âTax Controller or the nearest FIRS Regional Debt Management Office in case of further enquiries”, stressing that âa list of all our offices is available on our website:
www.firs.gov.ng“.
âAbdullahi Ismaila Ahmad
Director, Communications and Liaison Department
Federal Inland Revenue Service
Director, Communications and Liaison Department
Federal Inland Revenue Service
July 8, 2020
Recent Press Releases
President Buhari Extends Vaids Deadline To June 30
President Buhari Extends Vaids Deadline To June 30
President Muhammadu Buhari has approved the extension of the Voluntary Assets and Income Declaration Scheme (VAIDS) to June 30, 2018.Â
The short extension after the original March 31 date is based on the appeals of professional bodies and individual taxpayers.
However, no further extension of time will be approved after June 30.
The President added that a new date was also given, based on the conviction of the Ministry of Finance that the overall objective to increase compliance will be attained, and additional revenue will accrue.
A fresh Executive Order will be made to give legal backing to the new timeline.
According to President Buhari, “For a nation of people who are competitive and driven, it is not a pride that we are the lowest performer in tax to GDP, not just in Africa, but in the world.
“Nigeria’s growth needs are such that every Nigerian must do his duty to his nation, to his neighbour, and to himself.
“Hiding monies overseas, evading taxes by manipulation, and other unwholesome practices, have never developed a country, and for Nigeria to attain her true potential, these must stop.”
The President urged Nigerian companies and individuals to join government in the rebuilding mission, “and do the right thing by taking this window of extension to regularize.”
He added that the right thing may not be convenient or comfortable, “but in the long run, we will all have a nation we can be proud of.”
President Buhari further urged tax authorities to use the extension window to perfect plans to prosecute those who fail to regularize their tax status.
VAIDS is one of the key policies being used by the Federal Government to reposition the Nigerian economy and correct inherited underdevelopment.
The country has one of the lowest tax collection rates in the world at just 6% of GDP. This was partially a function of the reliance on oil that saw us abandon the historical revenue collection systems and switch to a culture of sharing resources, rather than generating them.
President Buhari had last year launched the Economic Recovery and Growth Plan (ERGP), and the VAIDS tax amnesty is first in the series of reforms that will transform our tax system and provide sustainable predictable funding for all tiers of government.
Tax revenues will ensure that public infrastructure is provided, and public services are funded to improve the lives of the people.
Taxes redistribute wealth from those who have more to those who have less, and VAIDS is one of the windows to achieve such.
Femi Adesina
Special Adviser to the President (Media & Publicity)
Thank You.Â
Communications & SERVICOM Department (C&SD),Â
20, Sokode Crescent,Â
Wuse Zone 5, Abuja.
Recent Press Releases
LIEN RESPITE ON DEAULTING TAXPAYERS’ ACCOUNTS EXPIRES IN 30 DAYS, SAYS FOWLER
LIEN RESPITE ON DEAULTING TAXPAYERS' ACCOUNTS EXPIRES IN 30 DAYS, SAYS FOWLER
Defaulting taxpayers who have no Taxpayer Identification Number (TIN) or those who have and are not paying their taxes with a turnover of N100 Million in their accounts, have only a 30-day reprieve, the Federal Inland Revenue Service, FIRS, has announced.
The Executive Chairman FIRS, Tunde Fowler, who said this today in Lagos in a meeting with Manufacturers Association of Nigeria (MAN), disclosed that 59, 000 companies who charge Value Added Tax (VAT) and sometimes Withholding Tax (WHT) do not have TIN to remit the VAT or WHT taxes they charge to the FIRS.
Fowler said the banks will return the lien on tax defaulters’ bank accounts after the 30 days grace period. The lien was lifted last Friday 15th February 2019.
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Fowler said to ensure tax justice, protect all taxpayers and also ensure that monies deducted from taxpayers in form of VAT or WHT by business owners are properly accounted for and paid into the right treasury, FIRS had to fall back on ordering restriction of defaulters’ bank accounts.
âInitially, the FIRS did not like to be telling all the stories. But now, with calls for clarification, we have to clarify this. I had a meeting with stakeholders last year where we identified, through records from the banks- that some operators who make a turn-over of between N100 million (One Hundred Million Naira) and N1 billion (One Billion Naira), do not have Taxpayer Identification Numbers. But in the course of their businesses, they charge VAT and perhaps WHT. If these companies do not have TIN, it means that they are not paying their taxes and at the same time, they are not remitting the VAT and WHT they charge on taxpayers to appropriate authority, in this case FIRS.
âBut sincerely, it is wrong for any company to deduct monies meant for the government and fail to remit them. Then we said, if these people don’t come forward to get TIN and pay appropriate taxes, we will freeze their bank accounts”, Fowler said.
At a stakeholders’ event late last year, Fowler carped about businesses who are doing well in Nigeria but are not fulfilling their civic obligations: âTax payment is not only for civil servants or salary income earners alone. Millionaires and billionaires, who make income from this economy need to pay taxes. It is not fair for any business or any person who makes an income from this economy not to pay taxes, while others pay.
âEach of us must contribute to the national till. If any taxpayer has the opportunity to make their wealth in this economy, the least they can do is to pay their tax.”
The Executive Chairman also explained that following turn-up of taxpayers to clear their arrears, the FIRS wrote to the banks to lift lien on bank accounts temporarily for a period of 30 day.
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âIn the last two weeks, the FIRS office was always besieged by taxpayers who want to clear their arrears. It came to a point we could not attend to all of them at the appropriate time. That is why we sent letters to banks to lift the lien for 30 days to enable taxpayers regularise their accounts.”
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The FIRS Executive Chairman assured taxpayers that FIRS’ online solutions have put to rest issues associated with delays in receiving notifications after there are transaction on taxpayers’ accounts.
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âJust register your company with your e-mails and phone numbers. Once payment is made on your account, you will get a notification immediately. You can go ahead and download and print the notification for presentation before your Tax Clearance Certificates are ready,” Fowler said.
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Some of the initiatives the Service is adopting to improve VAT compliance to include: Auto VAT collect, e-Services, VAT certificates, Central VAT filing, VAT coordination, Tax Audit and Investigation, Joint Tax Force, Taxpayer Education and SAG Platform (State Accountant General Platform), the FIRS Chairman said.
FIRS, Fowler promised, would honour proof of WHT deduction by any government agency.
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On behalf of the Service, Fowler apologised to the taxpayers whose accounts were frozen in error in the recent exercise. âWe also admit that there was an administrative error and some taxpayers’ accounts were frozen in error. We have expressed our apologies to the affected people. On behalf of the Service, I would like to apologise to them again,” he said.
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The President, MAN, Engr. Masur Ahmed, on behalf of the association thanked the FIRS for always giving a listening ear to their demands, requesting that the Federal Government may review VAT charges on animal feed.
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âIt is important that Nigeria should take a cue from other countries who have zero per cent VAT rate on animal feed. The Federal Government should sign an Executive Order and gazette that animal feed should be VAT exempt in Nigeria. This will go a long way to stabilising the economy because VAT charges on animal feed has adverse multiplier effect on the cost of production,” Ahmed said.
VAT revenue disbursed thus: 15% to Federal Government, 50% to State Government and 35% to Local Government, is critical to development projects at all levels of government. The VAT regime in Nigeria has a rate of 5%, while there are zero rated and VAT exempted goods and services.
Section 31 (1-5) of the FIRS Establishment Act empowers FIRS to appoint banks or any taxable person as a collection agent
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(1) The Service may by notice in writing appoint any person to be the agent of a taxable person if the circumstances provided in sub section (2) of this section make it expedient to do so. Section 2 says that: âThe agent appointed under sub section (1) of this section may be required to pay any tax payable by the taxable person from money which may be held by the agent of the taxable person.Â
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On the other hand, Section 49 of CITA further empowers FIRS to take all the steps we have taken with respect to recovery of tax debts from billionaire and millionaire tax defaulters.
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Wahab Gbadamosi
Head, Communications and Servicom Department
Federal Inland Revenue Service
21 February, 2019â
Recent Press Releases
FIRS hits N5.3 trillion, highest in Nigeria’s history, targets N8 trillion 2019
FIRS hits N5.3 trillion, highest in Nigeria's history, targets N8 trillion 2019
The Federal Inland Revenue Service, FIRS, re-wrote Nigeria’s collection history in 2018, when it announced today, that it has collected a total of N5. 320 trillion.
Tunde Fowler, Executive Chairman, FIRS, who made the announcement in Lagos today at a retreat: “Parliamentary Support for Effective Taxation of the Digital Economy” said it is targeting N8 trillion for 2019.
The N5.320 trillion collection is the highest revenue ever generated by FIRS in history. The highest in FIRS was N5.07 trillion generated in 2012.
FIRS’ generation of N5.3 trillion is significant as it was at a period when oil prices averaged $70 per barrel. Oil price was at an average of $100 to $120 per barrel between 2010 and 2013.
Oil component of the N5.320 trillion is N2.467 trillion (46.38%), while thenon_oilcomponent is N2.852 trillion (53.62%). From audit alone, FIRS collected N212,792 billionfrom 2278 cases with a huge reduction in audit cycle.
Said Tunde Fowler: “While we have been steadily increasing revenue collection over the years, our cost of collection has actually been going down. In 2016 we collected N3,307 trillion, in 2017 we collected N4,027 trillion and in 2018 we collected N5,320 trillion. Meanwhile, the cost of collection as a percentage of actual taxes collected has been reducing; in 2016 it was 2.6%, in 2017 it was 2.49% while in 2018 it was 2.14%.”
“The Service has been making tremendous efforts in also increasing the amount of non-oil revenue it collects. Non-oil collection has contributed 64.99% in 2016, in 2017 it contributed 62.25% and in 2018 it contributed 53.62%. This represents the government’s focus on increasing non-oil sources of revenue and the diversification of the Nigerian economy.
Fowler reiterated the fact that only companies that made a profit are obliged to pay taxes. According to him, if a company is situated in Nigeria it is only fair that it pays its fair share of tax for the benefit of all Nigerians.
The Executive Chairman also stated that various initiatives were implemented by FIRS to enhance tax administration and make taxation as easy as possible. FIRS deployed ICT initiatives that enable a taxpayer to pay taxes from anywhere in the world, at any time. With the e-payment channel one can pay taxes with the click of a button and one can also download their receipts. Other e-Services are the e-Registration, e-Filing, -Stamp Duty and e-Tax Clearance Certificate.
“Taxpayers can now also choose the tax office where they would like to conduct their tax transactions. Before now, if one was registered with a particular tax office, one had to conduct all of their tax transactions in that office. However, to make it more convenient for the taxpayer, they can now choose which ever office they wish to conduct their transactions with.
He noted that Nigerian taxpayers are embracing the modern way of tax collection, introduced by the FIRS through the 6-e Solutions.
Said Fowler: We are automating the collection of Value Added Tax, VAT in key sectors which will facilitate reduction in compliance cost in the long term. We are doing System to system integration between banks and FIRS. And I am happy to announce to you that we had a 31% increase year on year in VAT collection in the banks that have gone live between Jan 2017- Dec 2018 and collected 25bn so far “Amongst others, there is also the Government Information Financial Management Information System (GIFMIS), which links FIRS to the Office of the Accountant General of the Federation OAGF for real-time exchange of information and data. We are also automating the payment of VAT by states through the State Offices of Accountant General Platform (SAG). This will ensure that we aautomate and deduct at source and remittance of VAT and WHT from State governments contract payments directly to FIRS’s account and so far, collected 13bn.
He noted that taxpayers that requested for and processed their Tax Clearance Certificate, TCC through tcc.firs.gov.ng, from the comfort of their homes. “Tax clearance on the platform grew from 9,574 â 59,350 within a year of introducing the platform.
“Auto VAT collection in key sectors has also facilitated in reducing the cost of compliance. Between January, 2017 and December, 2018 VAT collection increased by 31% which translates to a collection of N25 billion. Overall, in 2019 VAT crossed the N1 trillion mark. Indeed, VAT is the fastest growing tax type in the world and even rich countries that did not depend on taxation have now introduced VAT, like the United Arab Emirates.
“In 2016 FIRS initiated a tax amnesty programme which attracted over 3000 applications for waiver of interest and penalties. The programme resulted in payment of over N68 billion out of about N96.2 billion liability established by the exercise.
The Voluntary Assets and Income Declaration Scheme (VAIDS) was initiated by the Federal Ministry of Finance and the FIRS received over 5122 applications under the Scheme. The Scheme resulted in voluntary declarations of over N92 billion, with over N54 billion paid so far by companies.
Fowler also explained how FIRS ascertained whether those companies with banking turnover of N1 billion are tax compliant or not. He said, “FIRS wrote to all commercial banks in May 2018, requesting for a list of companies, partnerships and enterprises with a banking turnover of N1 billion and above. This activity was aimed at ascertaining those companies that are compliant with the tax laws and those that are not compliant. So far, non-compliant organisations have paid about N21.75 billion.
“Companies that had a Tax Identification Number (TIN) and were paying were 45261, those that had a TIN but were not paying were 40611 and those without a TIN and who were not paying were 34504.”â
Recent Press Releases
FIRS generates N5trillion, targets N5.3tr by year-end
FIRS generates N5trillion, targets N5.3tr by year-end
The Executive Chairman, Federal Inland Revenue Service (FIRS), Tunde Fowler has said the Service has generated N5 trillion by the second week of December 2018, adding that the agency is at the verge of making N5.3 trillion at the end of the year.
If the FIRS pools N5.3 trillion revenue, that will be the highest revenue ever generated by FIRS in history. The highest in FIRS history is N5.07 trillion generated in 2012.
Fowlerâs generation of N5 trillion is significant as it was at a period when oil prices oscillated between $50 and $70 per barrel. Oil price was at an average of $100 to $120 per barrel between 2010 and 2013.
Speaking at the induction of new members of the Joint Tax Board (JTB) on Wednesday in Abuja, Fowler said FIRS has been able to record significant achievements following maximum support from the Presidency, Ministry of Finance, the JTB and other taxation stakeholders.
“This year, the FIRS, with the support of the Presidency, Ministry of Finance, the JTB and other stakeholders, has been able to generate up to N5 trillion. We believe that we should be able to close at least at N5.3 trillion which should be the highest in the history of FIRS. And we believe that with that additional revenue, the state and federal governments would be able to provide more services and more development to the people of Nigeria”, he said.
Fowler urged the new inductees to JTB to equip themselves with new ideas and embrace the Information and Communication Technology (ICT) to be able to face the reality of revenue collection in the ever-changing society.
“I see it as a privilege to be addressing this class of inductees today as history has chosen you at this critical point in time in our nations development to steer the ship of sustainable revenue generation.
“While preparing for this occasion, I came across an observation by the American inventor and author Ray Kurzweil where he noted that the rate of scientific and technological change is exponential rather than linear. This observation presupposes that the better part of applied wisdom requires that in our journey of life we are capable of identifying the most apt moment to know at what point to adapt to the ever-tumultuous sea that modern existence represents.
“It also indicates that we should be able to develop the ability to accept and embrace positive change, maybe due to the fact that change is inevitable, but more significantly that oftentimes, change presents us with the rare breaks that we can exploit to advance individual and collective goals and objectives”, he said.
The FIRS boss also stated that as global society continues to transform in structure and process, especially with new technologies and ways of doing things, the role that has been presented before tax administrators in an emerging economy such as Nigeria are quite enormous.
He said rather than being overwhelmed by the rapid changes of the 21st century, taxmen should remain undaunted and see the opportunities that are possible to us as a people in general and as tax administrators in particular.
“I believe that history has placed this responsibility on each and every one of us here today to be the critical success factors in our quest towards ensuring sustainable revenue generation for our various jurisdictions and for our country as well.
Developments in global politics and economics indicate a trend towards increased deemphasis on proceeds from oil and other commodity exports. Huge investments are being made everyday by more advanced economies towards seeking alternative energy sources; and sooner rather than later, oil as a mainstay of the nationâs economy will indeed no longer be sustainable, it is just a matter of time”, he added.
He further charged the JTB members: “This address is not an all doom and gloom affair, far from it. Rather, it is a clarion call to us all, especially you, our esteemed inductees, that though the path before you may seem strewn with sticks and stones, further down the road is a path paved with gold. To navigate to that path, we will need to have courage, a courage borne of our innate convictions towards being the tool for positive change in a time of economic uncertainty.
The JTB presents a unique platform for you to be that change. Your positive actions as the drivers of revenue generation are capable of achieving much impact. They are capable of providing the much needed funds that will provide the care that saves the life of that infant who is born in the remotest parts of Birnin Magaji in Zamfara State. They can provide the funds that ensures that a disadvantaged little child can have access to free quality education in a government funded public school in Ijesa-Isu in Ekiti State. Your actions as drivers of sustainable revenue generation in your respective jurisdictions beyond the bigger picture can achieve the little things that bring about great outcomes in the life of a nation.
“It is in the light of this that I charge you, even as you speak the words of your Membership affirmation, that you look beyond the immediate and see the deeper significance of your roles and your responsibilities as members of the JTB.
“The modest achievements that we have been able to accomplish in terms of internal revenue growth in recent time only point to the fact of the immense possibilities before us. We are encouraged that the results of the 9-month period in 2018 indicates that we shall be breaking new boundaries by full year. However, we can only strive to improve on our efforts and not rest on our oars. We can only become better at what we do, and we can only do that by embracing the positive trends in tax administration. Trends in automation, professionalism, autonomy, service-oriented approach to the taxpayer and all the positive trends that conform with international best practice.
“We are confident that by the end of this exercise and after listening to the various presentations, we shall all be better equipped for the task ahead of us”, he said. Former Secretaries of JTB, Femi Edgar, Mohammed Lawal Abubakar and the incumbent, Oseni Salawe Elamah made presentations on the history and journey of the Board to the new inductees.â