The Federal Inland Revenue Service has recovered over N33 billion from defaulting corporate entities that failed to remit their withholding tax (WHT) and Value Added Tax (VAT) collections from tax-paying customers.
The Executive Chairman of the federal tax administration agency, Mr Babautnde Fowler, gave this hint when he met with manufacturers on the VAT and WHT accruals, adding that over 10 million individuals and over 1.2 million business accounts have been captured into the tax net in the past 18 points.
Recalling that the agency directed banks to freeze various companies’ accounts following an audit by it which reflected that from their self-assessment they were not remitting collected WHT and VAT as appropriate, Fowler said that as at the time of the meeting over N33 billion had been paid from those accounts.
According to him, during the audit the process, the FIRS discovered over N96 billion in unpaid taxes, with VAT representing about 50 percent.
The FIRS boss expatiated: “What this means is that various operators who charged VAT did not remit them. But our main focus is to protect taxpayers whose withholding taxes were being deducted and not remitted as well as consumers whose VAT was being deducted and not remitted.
“One has to be aware that 85 per cent of the VAT goes to the state governments that are looking for money to pay salaries”, Fowler added.
Commenting further, the FIRS chairman disclosed that about 59,000 of the defaulting companies had no Tax Identification Numbers (TIN) yet they were collecting VAT from customers.
On the impact of the agency’s reform initiatives on timeliness of tax return filing so far, the tax administrator explained that “within 45 days, if you pay withholding tax and you do not get an email confirming the payment, you should know that they have not remitted the tax.”
Fowler said that based on the imposition of lien on their accounts in the banks, many of the defaulting corporate entities had come up to regularise their accounts in the last two weeks, adding that the agency has extended the period of grace to 30 days to allow defaulting taxpayers to regularise their tax records.
In his remarks at the forum, the President of MAN, Engr. Mansur Ahmed, described the interactive session as timely as it would help to resolve some of the challenges that manufacturers in the country were facing in respect of their tax filing and returns to FIRS and other related matters.
He expressed the believe that the forum would serve as a the platform for expressing the manufacturers’ experiences in view of the role manufacturing is playing in the industrial and economic development of the country and the multiplier effects on job creation, technology acquisition and wealth creation.
Ahmed pointed out that MAN shared the view of FIRS, which is part of the transformation initiatives of the present administration that seeks to create a more prosperous economy, through diversification of the economy and government revenue away from oil dominated foreign earnings, to more predictable sources that have the potential to accelerate the country’s economic growth.
He also commended the FIRS for its sundry tax reform initiatives, especially in the last three years; given the fact that revenue from taxes has significantly improved and is fast becoming another credible source of funding the yearly federal budgets.
