FIRS

Category: Press Release

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 – 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.”​

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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.

Fowler’s 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 nation’s 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.​

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Taxpayer population soon to hit 33 million, Bauchi launches tax payment on phone, ATM

Taxpayer population soon to hit 33 million, Bauchi launches tax payment on phone, ATM

The national taxpayer roll is set to hit 33 million, Chairman, Joint Tax Board and Executive Chairman, Federal Inland Revenue Service, FIRS, Tunde Fowler said yesterday.

He spoke in Bauchi as the State Governor Mohammed Abdullahi Abubaker launched payment of taxes through Automatic Teller Machines, ATM and through its website.

The new e-payment system is being powered by Interswitch. Fowler who celebrated the marked increase in revenue generation in Bauchi state under the leadership of Executive Chairman, Bauchi State Internal Revenue Service, Alhaji Jibrin Hassaini Jibo from about N4 billion to over N7 billion monthly.

Fowler spoke at the 142nd meeting of the Joint Tax Board (JTB).

“The role of IGR in the success of your administration cannot be overemphasized. Your administration has been a strong proponent of enhanced IGR and your support and encouragement for the Bauchi State Internal Revenue Service is ample testimony to this fact. Today, with the launching of the State IGR collection platform and the official website of the Bauchi State Board of Internal Revenue Service, we are only more encouraged that the rising IGR profile of the State will not only be sustained but will experience even added growth in the years to come.”

“You may wish to note that Bauchi State is actually one of the success stories when matters of IGR are discussed, both at the regional and at the national levels. Your Excellency may wish to note a few of the impressive statistics on IGR collection of Bauchi State. Computation of IGR collection for Bauchi State for the 9 Month period January to September 2018 hit N7.04 billion. This figure has already outperformed the Full Year 2017 IGR figure of N4.36 billion with a percentage margin of 61.2%.”

“Average quarterly growth rates for Bauchi as at Q3 2018 is 10.01%, which places it among the top ten highest average quarterly growth rates nationwide for the period. At the regional level, Bauchi State is actually setting a healthy pace for the region as her 9-month collection in 2018 is just over 26% of the entire IGR collected by the Six States within the region.”

Fowler noted that the JTB seeks to play an important role in an emerging global community where boundaries have moved beyond physical geographic expressions and where financial flows have become seamless and electronic, making it increasingly challenging for Governments to collect the taxes that are due them.

“It is in the light of the foregoing that the theme of this 142nd Meeting, which is ‘Consolidated Credible Database and Exchange of Information: Role of Stakeholders’ was selected.”

With the ongoing database consolidation of the JTB, an initiative being executed in collaboration with the Nigeria Interbank Settlement System (NIBSS), a National Taxpayer database with the data of well over 33 million individual taxpayers across the country is now a reality. Thus, having this consolidated database, which is clean and credible, opens the door to immense opportunities for the tax administrator at all levels.

“As we build on this data, we shall also be ensuring that the technological infrastructure that will facilitate the seamless exchange of data across levels of competent authorities are present. This entail significant investment in Information Technology via the provision of required infrastructure, equipment and as capacity building for personnel that will drive the processes.”

The JTB Chairman was optimistic that such investment in infrastructure will foster efficiency in taxpayer management and will align with the country being a signatory to the Multilateral Competent Authority Agreement (MCAA) which will trigger the Automatic Exchange of Information among Treaty Partners and two other initiatives of the Federal Government: The Voluntary Assets and Income Declaration Scheme (VAIDS), and the Voluntary Offshore Assets Regularization Scheme (VOARS).

Jibo said the state was able to improve its revenue collection as it has automated the Bauchi IRS collection platforms and streamlined our activities with other revenue generating agencies, plugged revenue leakages.’

Governor Mohammed Abubakar called State Governors to ensure automation of their revenue authorities in order to improve Internally Generated Revenue (IGR).

“The place of tax as the major thrust of economic growth is unquestionable since time immemorial. It is the first principle that defines an organized society. It is therefore disheartening that at this age where the cost of running government and provision of services is huge as a result of population growth, that some businesses and individuals still evades taxes. It is largely a question of patriotism. To build the Nigeria of our dream we must as citizens and as government show a great deal of patriotism in the discharge of our civic responsibilities.”

“The resounding feats, FIRS has achieved over the years by always exceeding its revenue target is another testimony that patriotism and professionalism are the major ingredients that propels efficiency and prosperity. This has also resonated the waves of positive change that blows in the country by stabilizing the economy for the government to fund its infrastructural revolution and social intervention programme, aside its other prime responsibilities.”

“In the same vein, the strenuous effort, Bauchi state internal revenue service has wielded at the complete abscission of the manual tax collection system is impressive. The automation of all the collection platforms has significantly raised our IGR by plugging revenue leakages at one end and providing our tax payers a convenient, reliable and efficient platform to fulfil their tax obligations to the State at the other end.”

“It gladdens my heart that, despite the great turbulence of the tide we sailed towards reinvigorating the apparatuses of governance, the State revenue generating apparatus has been restructured to an innovative and a technology driven one that moves in pace with the emerging realities of the tax environment. While, I am comfortable at the pace we are moving in this direction, I believe this meeting offers a wide niche of opportunities for greater improvements.”

“I, am mindful of how difficult collecting taxes could be, that is why I gave the Revenue Board the wherewithal to carry out their activities with full autonomy and strong political backing. We are working towards reviewing our tax laws to further lignify our taxes. We are also working towards adopting the Treasury Single Account (TSA) system and other robust initiatives that would place us at the appropriate place within the Nigerian tax sphere.”

“It is noteworthy we came at a most challenging period. We took over not only a dysfunctional system with empty treasury, low internally generated revenue profile, but also one with huge debts; including backlog of salaries and other economic and social deficits. Moreover, the federal allocation, which is the main source of funding to the government, plummeted greatly during the period as a result of the sharp slum in the prices of crude at the international market.”

“We give thanks to the Almighty Allah for given us the wisdom to remain focused. Right from the onset, we understand the quantum of challenges we would encounter and similarly, the level of confidence our people have reposed on us, especially, the aspiration to improve their lives in all its facets.”

“To satisfy our conscience, we took the task in trust. To make headway, we therefore stood persistently, against the interest of the selfish few. We made both personal and collective sacrifices as individuals and as a government and also evolved a number of human oriented programmes and policies that revamped the State on the path of economic and indeed, social recovery and growth. Today, even the critics have hallmarked our government with probity.”

“We have been able to judiciously utilize the State’s meagre resources towards raising all economic and social indices of our people. Our desire for excellence has clearly manifested in the quality of our projects. Our priority in the areas of Education, Agriculture, infrastructure and rural development is revolutionary in our history as a State.”

Ayo Tanimowo, the Interswitch representative at the event explained that Bauchi engaged Interswitch and Inteliworx, to provide a tax management solution for tax payer assessment, services rendition and report generation.

Both worked to provide to provide payment gateway to ease collections and block leakages; integrate their systems to ensure validation of tax payer identification and notification of e-collections done via the different channels. Electronic receipt is generated for every transaction, while the e-Receipts coded with necessary security features including barcode and scan code.​

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Finance Minister Commends Fowler As FIRS Rakes In N13 Billion From Billionaire Defaulters

Finance Minister Commends Fowler As FIRS Rakes In N13 Billion From Billionaire Defaulters

Less than a month after it commenced its substitution and payment for recalcitrant billionaire taxpayers, the Federal Inland Revenue Service (FIRS) has collected about N12.66 tax revenue, the Executive Chairman, FIRS, Tunde Fowler, has on Friday. 

He disclosed this when he received the new Minister of Finance, Hajia Zainab Ahmed at the Revenue House. 

Fowler spoke as the minister said commended the agency for shoring-up the non-oil revenue.

“The Ministry of Finance will continue to work collaboratively with FIRS to support all the efforts that you are doing. And as much as possible, we should interface frequently. For us, the directive I have is to increase the tax revenue and that is the most important task ahead of all of us. You have done well. And the reward for good work is more work”, she said. 

Hajia Ahmed urged the FIRS to “maintain the tempo” because literarily, the country depends on the work that FIRS does to shore-up the revenue collection to support the government. 

She encouraged all government agencies to work together to fish out all corrupt persons in the country, stating that this is the directive of President Muhammadu Buhari. 

“The FIRS is a very important agency of government. I wanted to underscore this importance. FIRS is one of the first agencies in the Ministry of Finance that I am meeting.  The Federal Government Medium Term Plan is hinged on diversifying the economy away from the oil revenues to non-oil sector. And the report that the Executive Chairman of FIRS has presented indicates that the diversification effort is working. This is reflected in the turn of the contribution of non-oil revenues over the last three years. 

“I am happy that we have a team in FIRS that is not only expanding the revenue base but also significantly improving tax collection and taking tax offices closer to the people and making it easier for the people to pay their taxes by online and e-tax payment procedures that you have undertaken. And I am sure that, from what I have heard today, that you would continue with all these processes.

“I am also glad that you are increasing cooperation with several agencies like the EFCC, ICPC and Nigeria Customs Service. This is important because the directive from the president for anti-corruption involves cooperation within yourselves as well as with anti-corruption agencies. It makes a lot of sense to priotise tax collection to larger categories: from the big ones to other ones. The effort you are doing in Abuja, Lagos and Osun is a commendable one and I encourage you to maintain the tempo in generating tax revenues”, she said.

She said the country needs to continue with the effort to strengthen the non-oil sector, stating that the part that FIRS should play is to continue with its effort so that the non-oil sector would generate larger part of the tax revenue on sustainable basis.

About a month ago, the FIRS in collaboration with other stakeholders launched the initiative to freeze the bank accounts of High Networth companies which fail to pay their taxes promptly.

Fowler told the minister that the initiative has pooled about N12. 66 billion into the government coffers.

“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 is aimed at ascertaining those companies that are complaint with the Tax Laws and those that are not complaint. So far, non-compliant organization have paid about N12.66 billion.

“The FIRS will continue to implement initiatives that will drive compliance and generate revenue by continuous taxpayer enlightenment, implementation of the Auto VAT Collect in other sectors of the economy, simplification of the tax processes especially for small taxpayers, strengthening collaborations with other agencies such as CAC, States Boards of Internal Revenue, Ministry of Trade and Investment, Nigeria Customs Service”, Fowler said. 

The FIRS Chairman also told the minister that the Service realised the sum of N2.983 billion from payment on demand notices on property owners who are being assessed based on their turnover and that 653 of 2, 672 of such non-filers have starting filing now.

From enforcement, Fowler said FIRS has collected a total of N47.5 billion from 2016 till date and $32.8 million, £5.9, netted N225 billion from audit and has collected more than N1 trillion above its January to August collection last year. 

He said that FIRS collection of N4.03 trillion in 2017 has 62.25 percent as non-oil while oil is just 37.75 percent. It was 64.99 in favour of non-oil in 2016 and 35.01 for oil. In 2018, the FIRS has done 54.56 percent for non-oil and 45.44 percent for oil receipts. 

Fowler added that Value Added Tax (VAT) receipt is on a steady increase. “So far in 2018, the FIRS has collected 773.49bn in eight months. The above collected this year has already surpassed that of 2015 (767.33bn), and is set to surpass 2016 (828.19bn), and 2017 (972.30bn) with four more collection months left in the year.

“e-stamp duties collection is on a steady increase. So far in 2018, the FIRS have collected 10.10bn in eight months. The above collected this year has already surpassed that of 2017 (10.9bn), 2016 (5.6bn), and 2015 (7.1bn)”.

Signed
Wahab Gbadamosi
Head, Communications and Servicom Department
Federal Inland Revenue Service (FIRS)​

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FIRS Going After Billionaire Tax Defaulters

FIRS Going After Billionaire Tax Defaulters

The Federal Inland Revenue Service (FIRS), will soon go after the bank accounts of defaulting taxpayers who are raking in billions in Nigeria and are not paying taxes, FIRS Chairman, Tunde Fowler has said.

In doing that, FIRS, through all banks in the country, will do substitution on accounts for such identified taxpayers. Such defaulting billionaire taxpayers have been identified by the FIRS, leveraging on banks data.

Fowler who disclosed this at a stakeholders’ meeting on Thursday in Lagos, noted that most of such taxpayers, who have between N1 and N5 billion in their accounts have no Taxpayer Identification Number, TIN, or have TIN and have not filed any tax returns as taxpayers.

Said the FIRS Chairman: “What we have done is what we call “substitution” which also is in our laws which empowers us to appoint the banks as collection agents for tax. So, all these ones of TIN and no pay and no TIN and no pay, to the total of 6772 will have their accounts frozen or put under substitution pending when they come forward. First, they refused to come forward in 2016, they refused to come forward under VAT and are still operating here. So, we are putting them under notice that it is their civic responsibility to pay tax and to file returns on these accounts.

Fowler explained further: “We looked all businesses, partnerships, corporate accounts that have a minimum turnover of N1 billion per annum for the past three years. First of all, the law states clearly that before you open a corporate account, part of the opening documentation is the tax I.D. From the 23 banks, we have analysed so far, we have 31,395 records, out of which effectively minus duplications we had 18,602.

“We broke those into three categories: Those that have TIN tax I.D, those that don’t have no TIN and of course no TIN no pay and those that have TIN and have not even paid anything.

“So, on a minimum, every company or business included here over the last three years have had a banking turnover of N3 billion and above. Some of them have had banking turnover of over N5 billion and have not paid one kobo in taxes. Now the total number of TIN and no pay is 6772. 

“So, if someone is good in mathematics and you take the minimum level of N3 billion multiply by 409 and they are operating within our society and economy and do not remit or make any tax”” payment.

Paraphrasing the Nobel Laurette, Professor Wole Soyinka’s famous pithy quotation of wasted generation, Fowler said this generation should not repeat Soyinka statement by their conduct: “I plead with the banks to support us in supporting us, you are supporting Nigeria. In supporting Nigeria, you are supporting all Nigerians and those who have chosen Nigeria as home. And most of all, you are supporting a future that we can leave behind for the upcoming youth of Nigeria.

“I remember this when we were growing up a statement made by Wole Soyinka that our generation is a wasted generation. That (the statement) has remained in my mind for many years. Wole Soyinka is still alive. His generation is a generation of 80s and above. Let us not look back and say also our generation has not left any value behind. I think it is time for us to change.”

He noted that FIRS is also paying closer attention to Audit.” We have started a comprehensive Audit exercise that involves both national and regional Audits… because we got to a position where we found out that majority of the major organizations that were allowed to do self-assessment, do not truthfully declare or pay the taxes that were due. To date we have raised assessment of over N805 billion from 1324 National Audits out of which 499 (taxpayers) have N219 billion.

“N219 billion, it can do a lot of things. It can provide certainly a lot more infrastructure, healthcare and educational facilities. These monies that are supposed to go into the Federation Account are shared between Federal, Local and State governments. So, every state can get an additional 1 billion from such monies, hopefully if you vote right, that governor, that governor would deploy it to the right place.

At the stakeholders’ at Oriental Hotels in Lagos, attended by representatives of the Nigerian Bar Association, (NBA), Manufacturers Association of Nigeria, (Man am, CBN, Nigerian Employers Consultative Council, NECA, Labour Unions, professional Accounting and audit firms, tax consultants amongst others, Fowlers noted that it is not fair nor right for businesses to be making money in the Nigerian space and fail or refuse to contribute no tax to the till.

“Gone are the time or days we ask what has government done for me.  We should ask what are doing for ourselves and the nation first. We should obey the law, pay our taxes, empower our governments at various levels then sit back and see the end results. If we see the amount of the budget that has gone into capital under this present government, but not only gone into the government but being expensed, it is at least three times more when the revenues were even higher. 

He did not spare the FIRS either, even though it had made over N1 trillion over its 2017 collection between January to August by N1 trillion. “If you look at 2018 revenue to date, between January and August, we have done N3.5 trillion, which is N1 trillion over 2017. But the main point I want to make is that majority of taxpayers that accounted for this revenue have not changed. The laws have not changed. And to a great extent, the consultants to these companies have not changed. If you look at 2017, there is an increase of close to N800 billion over the 2016 collection.

“The increase in 2018 so far showed N 1 trillion. If the same consultants advised or reviewed the accounts of the majority of the taxpayers, one would wonder why such large increases occurred. It is either the taxpayers did not disclose fully their financials to the consultants or the consultants involved in tax planning.”

Either way, it is not to the wellbeing of our nation, Nigeria

He noted the perfidy of businesses who collect VAT and not remitting to government covers: “We have found out that a number of businesses , collect VAT  that do not remit to government, So we are going back old school way and I would just like to publicly display this, this is the new VAT  certificate which would be given to all tax payers and we expect them to display it in their places of business because we also found out and I will actual figures that the number of businesses were not even  registered tax payers and were collecting VAT. Without having a tax, I.D as an agent or a collect of VAT there is no way you can remit that VAT to government. So, in short, they sort were collecting and adding it to their income and spending it. 

The FIRS Chairman noted that taxpayers can now enjoy the flexibility of choosing their tax offices and paying online “Prior to now, at times your tax office can be an hour away from your office, tax payers can now choose where their file reside You can pay anywhere in the world: London, Dubai, New York, pay your taxes online and download your receipt immediately.

Citing the example of taxes FIRS is levying on corporates who have property, but are now being assessed on the value of their property’s turn over, Fowler clarified on why such property owners are being assessed for tax

“First of all, banking turnover does not mean that is the turnover of your business it simply means the money that has gone in and out of your account, but what the tax law says is that” if you do not file your returns and you are in constant default we use turnover as a basis of estimating your tax liability’. For example, if your turnover is N100 million we assume that 20% of that is profit and we tax that at30%

“Some of them claim not to own the property, those of them that claim not to own the property and of course were sent to government, Presidency to decide what would happen to those properties that have no owners. To those that have owners and have not paid they would be prosecuted. We are also in the process of going to court to get the approval of the court orders to sell those properties. We are not only doing that Abuja. We’ve concluded in Lagos. We are currently doing it in Osun, Oyo, Kaduna and eventually we would cover the whole federation.

“The idea here is simple if you have had the opportunity to make your wealth in this economy, in this society, the least you can do is pay your tax.

“We have not included any group who by law are not meant to pay tax in this group. So far, we have sent out 2980 letters and we believe that before the end of September we would get most of them out.”

See more:
-In New Revenue Drive, FIRS Targets Billionaire TaxDefaulters – ThisDay
https://www.thisdaylive.com/index.php/2018/09/10/in-new-revenue-drive-firs-targets-billionaire-tax-defaulters/ 

-Tax default: FIRS targets bank accounts of 6,772 billionaires – Daily Trust 
https://www.dailytrust.com.ng/tax-default-firs-targets-bank-accounts-of-6772-billionaires.html 

-FIRS to raise tax-to-GDP contribution by 20% – Punch 
https://punchng.com/firs-to-raise-tax-to-gdp-contribution-by-20/

-FIRS to sell tax evaders’ properties, freeze 6,772 accounts – Punch 
https://punchng.com/firs-to-sell-tax-evaders-properties-freeze-6772-accounts/

-Over 6,772 billionaires don’t pay tax – FIRS – Daily Post Nigeria
http://dailypost.ng/2018/09/10/6772-billionaires-dont-pay-tax-firs/

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Five Tax Amendment Bills Coming Says Vice President Osinbajo Press Release

Five Tax Amendment Bills Coming Says Vice President Osinbajo Press Release

Five tax amendment bills are coming, Vice President Yemi Osinbajo announced today in Abuja.

The Vice President said the Federal Government’s Committee on the National Tax Policy (NTP) has drafted five amendment bills which will soon be sent to the National Assembly. This is in collaboration with states and other stakeholders to ensure that Nigeria’s tax laws and the NTP are friendly and realistic.

“Our tax system requires review, to among others, ensure removal of obsolete and contradictory clauses. That was why we raised a committee in 2016. The committee’s work has produced five amendment bills that will soon be sent to the National Assembly. Our aim is that no one is left at the mercy of a bad tax regime. I am happy at new levels of cooperation between states and the Federal Government which we have seen in the implementation of VAIDS. I am pleased to note that the number of registered taxpayers is now in excess of 19 million”, said the Vice President.

Hesaidembracing technology to collect tax and to block leakages in public expenditure—like the Treasury Single Account(TSA) and accompanying transparency in public expenditure, — are significant game changers. He compared the changes this brought about to the impact which invention of electricity had on people’s lives when it was invented.

Osinbajo who spoke ex-tempore noted that the CITN conference held on the day when Chief Obafemi Awolowo died some 30 years ago. He noted that free education, which was funded solely from tax revenue, ensured a spiral in school enrolment in the old Western region-from 355,000 in 1952 when it was introduced to 811,000 in 1959. It was the highest in Africa at the time.

The Vice President noted too that key infrastructural provision in Western Nigeria: University of Ife, Airport hotel in Ikeja,25-storey building Cocoa House building in Ibadan, several industrial estates in many parts of the Western Region, were made possible by tax money from citizen’s pockets.

Citing further statistics about national tax collection, Osinbajoobserved that Lagos alone generates more Internally Generated Revenue than over 30 states combined. “Of the 70 million taxable individuals, only 14 million pay any form of tax. Of the 943 individuals who pay any form of Self-assessment and who pay above N10 million, 941 live in Lagos State. Two live in Ogun State.”

The Vice President who observed that tax is not a subject that excites most people in the world, said tax is a social-contract question that should bind citizens and trigger robust interest in governance, accountability and democracy. He recalled that it was tax that triggered the slogan “No taxation without representation” that was the rallying cry for the American War of independence. Tax, he said, was also at the root of the riots in Aba and Abeokuta- both led by women.

He noted the gains of over N200billion which the Federal made from the deployment of technology to track ghost workers and the Treasury Single Account (TSA) from whence the Federal Government has made savings of about N4 billion monthly. This has strengthened its ability to spend more on infrastructure, he said.

The VP said the economic prosperity of Nigeria will come from taxation and encouraged taxpayers to always pay the right taxes at the right time as that is the fulfilment of their responsibilities as citizens. 

At the same event, the Executive Chairman of the Federal Inland Revenue Service (FIRS), Tunde Fowler, said the Service is building a robust tax system that is making tax payment convenient to taxpayers both at the federal level and at the states and local government levels.

“What we are doing is to build a tax system that will not only be effective at the Federal level but also at the states and local government levels. Nobody wants to pay taxes. Not even the tax administrator. So, we have to make tax payment convenient and attractive. Attractive in the sense that people must see what you are doing with the tax money. That is what the FIRS and the Joint Tax Board (JTB)are doing”, he said.

Fowler said it is the culture of the JTB to go to the states to inspect projects that state governments are handling. By doing that, he said, “states which are not doing well get inspired by their counterparts who are using the tax money well to build facilities for their people. 

“The only way you can improve the tax system is through technology. FIRS has rolled out six-online solutions through which you can pay your taxes online (e-payment), e-receipt. You can download your receipts and authenticate the receipts using your smart phones. We have e-Stamp duties, e-filing, e-Withholding Tax e-alerts, e-payment, e-Tax Clerance Certificates, (etc). 

“Our job is like that of a medical doctor, we ensure that businesses are healthy. It is when businesses are healthy that they can make profits and pay taxes.

We have changed the orientation of our staff to make them see their jobs as stewardship. We let the staff know that they are there to serve the taxpayers”.

The theme for this year’s CITN conference is ‘Institutionalising Taxpaying Culture in Developing Economies’.

CITN President, Cyril Ikemefuna, said theme for the year was crafted given the need for a change in the taxpaying culture in Nigeria. 

Signed
Wahab Gbadamosi 
Head, Communications and Servicom Department 
Federal Inland Revenue Service​

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FIRS intends to Surpass N5.3 trillion 2018 Collection

FIRS intends to Surpass N5.3 trillion 2018 Collection

The Executive Chairman, Federal Inland Revenue Service, Mr Babatunde Fowler, has said that the service will this year surpass the N5.3tn revenue generated in the 2018 period.

He said this during a chat with finance journalists on Thursday in Abuja.

Fowler said that the service had embarked on a series of reforms aimed at making it easier for taxpayers to pay their taxes.

He said the reforms had started yielding results as the service was able to generate its highest ever tax revenue of N5.3tn in 2018.

The FIRS boss explained that while huge revenue could be generated from oil, such revenue was unsustainable due to the volatile nature of the crude oil prices.

Fowler said the government recognised the importance of non-oil revenue to economic development, adding that this was why the service was being positioned to generate adequate revenue for the distribution by the three tiers of government.

He said, “We recorded some improvements last year as well made the sum of N5.3tn which is the highest in the history of the service.”

“But it’s not about that but on what it can do. Many people believed that if we are generating so much money, then the Federal Government budget has no problem being funded.”

“But they tend to forget that what we generated is shared between the three tiers of government.”

“We generated N5.3tn and the highest before then for the country was N5.07tn. But the difference here is that in 2012, the oil revenue tax accounted for 64 per cent while in 2018 oil revenue accounted for 46 per cent.”

He said as a result of the dwindling oil revenue, the FIRS was working hard in ensuring taxes were collected and remitted for the benefits of the nation and all the three tiers of the government by targeting non-oil revenue.

In carrying out its mandate within the dynamic economic environment, the FIRS boss said the service had adopted initiatives to ensure a robust tax administration that was beneficial for all stakeholders.

 

Signed
Wahab Gbadamosi
Head, Communications and Servicom Department
Federal Inland Revenue Service (FIRS)​

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Fowler – New African Tax Chair Lists Priorities, Says Won’t Disappoint Africa

Fowler - New African Tax Chair Lists Priorities, Says Won't Disappoint Africa

The newly elected Chairperson of the African Tax Administration Forum (ATAF) and Executive Chairman of Federal Inland Revenue Service (FIRS), Mr. Tunde Fowler, has said he will not disappoint the confidence reposed in him by the tax body as he identified his priorities in the next three years.

According to Fowler, his priorities include: robust exchange of programmes to build capacity for member-states, renewed membership drive to increase numbers of members and make active dormant members, especially from North Africa, secure continued support of ATAF Development Partners and to consolidate ATAF’s collaboration with international and regional multilateral bodies.

“Be assured you have made good choice. I shall not disappoint you”, Fowler said in his acceptance speech.

Fowler told representatives of 38 member-countries of ATAF and stakeholders across the continent, Wednesday in South Africa that ATAF needed to be strengthened in order to adequately face the challenges of economic downturn in African countries.

“Our organization must be strengthened to remain relevant and provide support to members as they grapple with the peculiar challenges facing Tax administration in the current global economic downturn which is putting governments under severe pressure in both the developed and developing countries. The times we are, makes the job of the revenue collector, most arduous”

“At such challenging times for tax administrators, I shall be preoccupied with accomplishing, working the members of the Council and member countries and the Secretariat over the next two years: improve the Fundingavailable to support the lofty plans ATAF (Trainings, Technical assistance and staff exchange programmes, etc) has towards assisting members improve their capacities to collect the revenue our governments require to improve the wellbeing of Africa’s teeming populace; intensify membership drive–to increase numbers of members and make active dormant members, especially our brothers from North Africa and secure the continued support of our Development Partners”, Mr. Fowler said.

Fowler said he would work with his team to Consolidate ATAF’s collaboration with international and regional multilateral bodies.
“To ensure that Tax administration is given the required levels of support from the highest political levels in our countries, we will ensure that ATAF continues with more vigour its engagements with the African Union (AU) and specifically the AU Forum of Finance Ministers. Also, ATAF’s collaboration on tax matters with such bodies as OECD, WATAF, CIAT, CATA will be strengthened to ensure that ATAF continues to benefits from the vast experience in tax matters available within the membership of these bodies and to ensure a well-functioning and properly staffed ATAF Secretariat (with a good spread of Africa’s linguistic diversity), where the Staff are provided with the adequate incentives and well equipped to attend to the needs of ATAF members”, he said.

Mr. Tunde Fowler, the first Nigerian to head ATAF emerged the winner of the keenly contested election during the Forum’s 4th General Assembly meeting in Durban, South Africa and was elevated from a Council Member to the Council Chairman.

ATAF announced the FIRS Chairman’s victory on its twitter @ATAFtax handle
thus: “Mr Babatunde Fowler, Chairman of the Federal Inland Revenue Service of Nigeria elected ATAF Council Chair 2016-2018. He will be deputised by Mauritius”.

Mr. Fowler is the 3rd Chairperson of ATAF while Mr. Oupa Magashula of South Africa was the Forum’s first Chairperson. 

By his election, the FIRS Chief Executive takes over from the Commissioner General of Zimbabwe Revenue Authority, Mr. Gershem T. Pasi and will preside over the affairs of the Forum from 2016 to 2018. 

Signed
Wahab Gbadamosi
Head, Communications and Servicom Department​

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FIRS Offers New Tax Regime To Further Compliance

FIRS Offers New Tax Regime To Further Compliance

The Federal Inland Revenue Service (FIRS), has taken a major step to help reduce tax liabilities arising from penalty and interest on taxpayers from 2013 to 2015.

The measure is part of the Service efforts to promote voluntary compliance and shield taxpayers from the burden of carrying forward old tax liabilities as regards to interest and penalty.

FIRS announced in a public notice signed by its Executive Chairman, Mr. Tunde Fowler, that taxpayers in default should come forward to declare their indebtedness within stipulated 45 days while the waiver lasted.

It also required that such defaulted taxpayers must present a payment plan on the outstanding Principal Tax Liability acceptable to the Federal Board of Inland Revenue. 

The special window which commenced on October 5, will end on November 24, 2016, and is expected to address accumulated penalty and interest, and not principal tax due.

Fowler, said that the waiver would allow part payment as well as full payment of undisputed tax liabilities which must be paid, while the balance would be paid instalmentally.

He advised taxpayers who have not fulfil their tax obligations to take advantage of the special window to pay a reasonable amount of not less than 25 percent of the principal tax liabilities.

“By this public notice, FIRS invites taxpayers who have not been fulfilling their statutory tax obligations, to take advantage of this special window, failing which all legal means at the disposal of the FIRS will be deployed including criminal prosecution of the Board and Management of the defaulting organisation,” he said.

The Service is relying on the provision of the Companies Income Tax Act CAP C21, LFN 2007 and Federal Inland Revenue Service Establishment Act (FIRSEA) 2007, to offer the special window.

The combined sections stated that: “the FIRS in exercise its powers under Section 85 (3) of the Companies Income Tax Act CAP C21 LFN 2007 (as amended) (and replicated in Section 32 (3) of the Federal Inland Revenue Service Establishment Act (FIRSEA 2007) hereby invites all principal officers, especially Chairmen, Managing Directors, Chief Executive Officers, Executive and Non-Executive Directors, Chief Financial Officers and all company owners or their representatives, to take advantage of the special window to avoid payment of penalty and interest on tax due between 2013 to 2015.”

In a related development, the Service has urged taxpayers to file their Companies Income Tax (CIT), Value Added Tax (VAT) and Withholding Tax (WHT) returns at the FIRS office nearest to their place of business or choice of location.

Taxpayers are advised to apply to the Tax Controller indicating the tax office of their choice and request for the transfer of their file and Taxpayer Identification Number (TIN).

This measure is also expected to ease processes of tax administration, reduce cost for taxpayers and enhance voluntary tax compliance as well as service delivery to the tax paying public.

Signed
Wahab Gbadamosi
Head, Communication and SERVICOM Department​

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How Autonomy Could Help Tax Administration In Africa, By Tunde Fowler

How Autonomy Could Help Tax Administration In Africa, By Tunde Fowler

The Executive Chairman, Federal Inland Revenue Service (FIRS), Mr. Tunde Fowler, has painted a bright future of tax administration in Africa, stating that the continent holds much more revenue generation prospects.
Speaking to Chief Executives of African Tax Authorities at the African Tax Administration Forum and International Monetary Fund (ATAF-IMF) high-level seminar in Cape Town, South Africa over the weekend, Fowler urged African leaders to set their eyes on granting autonomy to their Revenue Authorities as that will strengthen the tax institutions and prime them to generate more revenue for their countries.

Fowler said: “Clearly, Revenue Authorities across Africa have the potential to generate funding for their respective governments and they will perform better if they are: allowed to fully be in charge of their day to day operations and empowered to hire staff, pay competitive salaries and provide regular training for staff”

The FIRS Chairman added that Nigeria’s experience is worthwhile: “The compelling evidence from Nigeria’s experience is that wherever Revenue Authorities have been granted operational, administrative and financial autonomy and allowed to operate with minimal civil service bureaucratic encumbrances, revenue administration has been enhanced and tax collection performance have gone up significantly. Autonomous Revenue Authorities with independent Boards have proven to be beneficial for the actualization of their mandate to generate funding that government require for projects and programmes”, Fowler said.

As a result, Fowler pointed out that tax revenue grew from N1.846 trillion in 2007 when FIRS was granted autonomy to N5.01 trillion in 2012; N4.805 trillion in 2013, N4.746trillion in 2014. In the LIRS too, tax revenue grew from N50 billion in 2007 to 300 billion in 2014.

In the Nigeria’s experience, the falling revenues from Oil in the 1990s, prompted Government to focus more on tax revenue generation, by adopting series of tax reforms initiatives, Fowler added.

He noted that owing to years of neglect due to government’s focus on revenues from Oil, the apparatus of tax administration operated at less than optimal levels.

He also recalled that the Revenue Authority was faced with several challenges such as: operating under the Ministry of Finance with the attendant bureaucratic encumbrances, absence of financial and administrative autonomy, existence of leakages in the revenue collection due to lack of transparency and corrupt practices by tax officials and taxpayers; low staff morale as a result of poor remuneration and poor working conditions of tax officials; prevalence of manual means of tax operations and low usage of Information and Communication Technology (ICT); neglect of tax payer education and absence of quality service delivery and inadequate human resources and skills set as a result of inadequate training.

The FIRS Chairman recalled various Study Groups and Working Groups reports that have shaped tax administration in Nigeria. “The recommendations of the Study and Working Groups culminated in the establishment in 2007 of an autonomous FIRS with its own independent Board, and the promulgation of the Federal Inland Revenue Service (Establishment) Act, No. 13, 2007)”, he said.

It was the second time a tax agency will enjoy autonomy in Nigeria with an Act of Parliament; the first being the enactment of the Lagos State Internal Revenue Service Law in 2006 by the Lagos State House of Assembly.

The FIRS Chief Executive explained that the FIRS, with an oversight by an independent Board, has been able to initiate and implement various revenue collection enhancement projects and programmes such as:

  • Tax office modernization – upgrade of existing offices, construction and equipping of new model Tax offices  and conducive working environment for Tax officials, a ‘welcoming atmosphere’ for taxpayers as well as operations vehicles to optimise official performance;

 

  • Taxpayer Service education and enlightenment activities – regular use of the mass media to enlighten taxpayers on their rights and obligations , which is aimed at promoting  voluntary compliance as a key attribute of a modern and vibrant tax system and effective collaboration with taxpayers;

 

  • VAT Auto-Collect project  recently deployed system, aimed at on-line, real time deduction and remittance of VAT at source from key sectors such as Airlines, Telecommunications and Banking and Financial institutions;

 

  • Integrated Tax Administration System (ITAS) project – aims at automating all core tax administration processes (registration, filing, audit etc.), provision of multiple tax payment channels, such as e-tax pay, Remita, GIFMIS, etc., aimed at making compliance/payment of taxes easier for Taxpayers and for improved revenue collection;

 

  • National Taxpayer Identification Number (TIN) project – in collaboration with States Internal Revenue Services an internet-based system (SIGTAS) has been deployed to register and uniquely identify taxpayers across Nigeria, including the capture of taxpayer biometrics;

 

  • Massive Taxpayers Registration activities – which has led to significant widening of the tax base, with the registration over of 700,000 new corporate taxpayers within the past 12 months;

 

  • i-SHARE Project – a Project initiated to ensure effective communication and collaboration within the Service and with other stakeholders.

 

  • Self-Assessment Project – aimed at assisting taxpayers file tax returns as and when due, calculate their income, expenditure and tax liabilities hence improve taxpayer service and voluntary compliance

The FIRS Chairman saidwhile there is no ‘one size fits all’ way to do this, a good way to start is to put in place the legal and administrative framework to ensure that the Revenue Authority can function with less public service bottlenecks and have access to the resources required to deliver on their mandates for domestic resource mobilization and funding for governments across Africa.

He noted too, that political support from the topmost level by political office holders and general policy direction from the supervisory Ministries of Finance, will be critical to the success of Revenue Authorities.

Signed
Wahab Gbadamosi
Head, Communications and SERVICOM Department

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