By James Orji
Starting from next month the Federal Inland Revenue Service, FIRS the agency responsible for collecting tax for the federal government says it will embark on a major tax drive to collect tax arrears from individuals and companies owing the federal government.
In January, Johannes Oluwatobi Wojuola, the special assistant on media and communication to the chairman of FIRS, Mamman Nami said the agency collected N6.4 trillion in the year ending December 2021.
He said, “The FIRS, in the year 2021 collected a total of N6.405 trillion in both oil (N2.008 trillion) and non-oil (N4.396 trillion) revenues as against a target of N6.401 trillion,” Nami said.
”Companies Income Tax amounted to N1.896 trillion; Petroleum Profits Tax amounted to N2 trillion; Value Added Tax amounted to N2.07 trillion; Electronic Money Transfer Levy amounted to N114 billion; Earmarked Taxes amounted to N208.8 billion; among others.
“Non-oil sector contributed 69 percent of the total collection in the year, while oil sector’s contribution was 31 percent of the total collection.
“The Service issued certificates for the sum of N147.8 billion tax credit to private investors and NNPC for road infrastructure under the Road Infrastructure Development Refurbishment Investment Tax Credit Scheme created by Executive Order No. 007 of 2019.”
Within the same year, the agency said close to N18 billion are owed by companies transacting business in the country through tax evasion.
The belief is that more revenue could still be collected to fund the government budget if the tax net is expanded to bring in more Nigerians and businesses who are eligible to pay tax.
The prevailing situation, the FIRS said is no longer palatable, and is now poised to embark on a nationwide Value Added Tax, VAT and Withholding Tax, WHT compliance exercise from July, 2022.
This information is contained in a public notice announcing the compliance monitoring exercise, and signed by the FIRS Executive Chairman, Muhammad Nami.
The exercise is also coming on the heels of an earlier notice by the Service to commence the enforcement and recovery of unremitted tax deductions owed the Federation by some States and Local Governments.
The agency said, the VAT and Withholding Tax Compliance Monitoring exercise will involve teams of FIRS officers visiting selected taxpayers and taxable persons to review their VAT and Withholding Tax records.
FIRS said in the Notice that, “The Federal Inland Revenue Service (FIRS) shall embark on a nationwide VAT and WHT compliance monitoring exercise with effect from July 1, 2022.
“As a result, teams of officers from the Service shall visit selected taxpayers, taxable persons (including companies, NGOs or MDAs) to review their VAT and WHT records.
“All taxable persons or tax agents who have made deductions of VAT or WHT on behalf of the Service are required to immediately remit all such deductions to the FIRS within two weeks of this publication.
The exercise will cover 2016 to 2020 accounting years for taxable persons whose records have been audited by the Service up to 2015 accounting year, the agency said.
