The Executive Chairman of the Federal Inland Revenue Service (FIRS), Mr. Muhammad Nami, has said that the mandate of the revenue agency is not to grant tax waivers to taxpayers in the country but to collect taxes that are due to the federation and the Federal Government as provided in its enabling law.
The seasoned tax administrator made this clarification to debunk some news which indicated that some companies, including Dangote Sinotruck Limited, Lafarge, Honeywell, etc, were granted tax waivers on pioneer status by the FIRS and other government agencies totaling a sum totalling N16 trillion between 2019 and 2021.
Reacting to the misleading news report, Nami categorically stated that: “FIRS does not have the power or responsibility of facilitating or even implementing tax waivers to investors in Nigeria. There are relevant agencies of government that are charged with such responsibility.”
He, however, explained that the FIRS was not unmindful of the objectives of granting tax waivers to investors, listing some as including “helping to grow local companies, stimulate economic growth, and earn investors’ confidence”.
Nami maintained that he was “confident that the companies which are now enjoying tax breaks will eventually exit shortly and begin to pay taxes to the Federal Government as is currently being done by the companies that have equally enjoyed such tax breaks in the past and are now paying taxes in hundreds of billions of Naira. Such companies will continue to pay taxes to the government so long as they remain in business.”
Also, the FIRS’ chief further pointed out that “the companies enjoying the Pioneer Status will be exempted from paying only the Direct Taxes (e.g CIT, EDT) from their profits but will continue to act as agents of collecting and remitting Indirect Taxes (e.g VAT, WHT) in the ordinary course of their operations”.
He restated his commitment to achieving the mandate of the revenue agency as it relates to assessment, collection, and accounting for taxes due to the federation and the Federal Government.
While acknowledging that the task is challenging, especially at this time of global economic disruption occasioned by the Russia-Ukraine war and the Covid-19 pandemic, Nami said that the management remained steadfast in achieving the target set for it by the Federal Government.
He recalled that in 2021 fiscal year, the revenue agency surpassed the revenue target set for it by the government by collecting N6.4 trillion in taxes and promised that “the Service is poised to perform even better than its record for last year.”
