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FIRS To Sanction Defaulting Firms, Tasks States On Automation

The Federal Inland Revenue Service (FIRS) has threatened to sanction five companies for failure to file annual tax returns as and when due.

The Service in a statement listed the allegedly erring companies as Blackbit Limited, Pay Day Lotteries Limited, Raytan Limited, New Gate Logistics Limited and Give N Take Lottery Limited.

It stated: “The aforementioned companies, their accredited representatives, or directors are requested to immediately contact the Service within thirty (30) days of this Notice to provide the required information in this regard.”

The federal tax administration agency explained that non-compliance to the directive would attract enforcement action and criminal prosecution, hinting that it may soon resort to publishing names of defaulters, adding that it may initiate criminal proceedings against the companies.

It clarified: “This is to also remind all business entities to voluntarily register and file their tax returns at the nearest FIRS Office, as the Service will commence the publication of the names of non-compliant companies for enforcement and criminal prosecution in line with the provisions of the relevant tax laws.”

Meanwhile, the Service has advised revenue generating authorities at sub-national level to embrace automated processes and e-solutions for effective tax administration.

The Executive Chairman of the Service, Mr Muhammad Nami, gave the advice on Monday in Abuja, at the maiden Nigeria Governors’ Forum (NGF) Technology and Tax Event for heads of State Inland Revenue Services and authorities.

The event, organised by the NGF, in partnership with the World Bank and the International Centre for Tax and Development (ICTD), was aimed at supporting a learning ecosystem for tax administration in Nigeria.

Nami, who was represented by the agency’s Executive Director, Mallam M. Abubakar, said it had become imperative for the sub-national governments to rev up their Internally Generated Revenue (IGR) in order to augment the shortfalls in their allocations from the Federation Account.

Describing taxation as the most reliable and sustainable source of government revenue if well harnessed and effectively administered globally, the tax administrator stressed: “For us as a mono-product economy, the reliance on oil revenue in the previous years has exposed our dear country to huge revenue challenges and resulted in poor budget implementation across the three tiers.

“Therefore, proffering solution to these nagging revenue challenges requires a deliberate strategic action plan hence, the need and justification for today’s event. Taxation, in most advanced jurisdictions, has gone beyond the bricks-and-mortar model but relies more on data and intelligence which are driven by technology.

“The adoption of technology in revenue administration processes is crucial and a major enabler for enhanced and sustainable revenue generation in a globalised and knowledge driven world.

“Therefore, revenue authorities at all levels must adopt automated processes and embrace e-solutions both in their internal operations and in dealing with the taxpayers within their respective jurisdictions,’’ the FIRS’ boss added

According to him, has taken some steps at automating its processes from e-registration, e-filing, e-payment, e-receipt, e-collection and e-TCC, to ensure that it improves on tax collections.

The executive chairman said that there was no better time for the event than now when there is a growing need to shore up revenue in order to meet the budgetary gaps facing the federal and state governments.

Nami stressed the need for the sub-national governments to embrace e-solutions in order to improve effective taxation of the informal sector which remained a huge source of untapped revenue, the harmonisation of taxpayer database and exchange of information with other stakeholders.

In his remarks, the NGF Director-General, Mr. Asishana Okauru, said that the lessons of the COVID-19 pandemic demonstrated clearly that all revenue administrations needed to move to a digital future.

He explained: “Specifically for tax authorities, one big lesson that we have learnt is the criticality of internet-based business support systems and payment platforms for the automation of all back-end operational processes and payments across all revenue streams.

“From our research last year, we already know that most contact-intensive taxes are at risk, given the lessons we learnt during the period of the lockdown where taxes collected from contact-intensive taxes fell by an average of 40 per cent across all states in Nigeria.

“Coupled with a weak environment for tax policy and tax legitimacy, low technological integration in tax administration has undermined efforts to mobilise domestic revenues in the country. This has undermined the capacity of tax authorities to collect taxes efficiently and the ability of taxpayers to meet their tax responsibilities conveniently.

“Amidst this transformation, we also recognize risks of data ownership, data protection and cyber security. This, each government must envisage.

“It would require a strong in-house IT team and an experienced legal department that will help protect the interest of all parties, including taxpayers’’, Okauru maintained.

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