The Acting Chairman, Federal Inland Revenue Service, FIRS, Mr. Tunde Fowler, has said that he would not use consultants to collect taxes.
He spoke at a meeting of the Joint Tax Board, JTB, in Abuja. The use of tax consultants to collect taxes, a practice that is prevalent among state governments have been criticised as illegal and open to corruption between the consultants and state governors.
Fowler said that the staff strength of the FIRS was not enough to undertake all that would be required in tax administration and as such consultants would be engaged but their duties would be exclusive of tax assessment and collection. His words: “You can imagine a staff roster that can audit the books of well over 400, 000 corporate organisations. It won’t work. Therefore to increase the level of transparency and accountability, we would engage consultants. But these consultants will only gather data. The law does not allow them to undertake assessment.
The law does not allow them to collect revenue on behalf of government. “Consequently, they will collect data; they are to assist our staff. We will do the assessment and issue the Demand Notice for the tax to be paid”. On the level of tax payers compliance, the chairman disclosed that only slightly over 30 per cent companies and other businesses pay tax in the country. A situation he said must change.
According to him, “There are about 450, 000 corporate organisations with only one out of every three paying tax. Based on our objectives, we want to have at least 99.9 percentage success level of compliance. Meaning that every individual that the state level and every corporate organisation at the federal level is in the tax net and pays the appropriate type of tax.
“We have exchanged information with all states’ Internal Revenue Boards. We have all the information on the database. We have given them out already and in case they need further information that they currently don’t have on their database, we will always collaborate with them. With this development, we should have a growth in tax payers both at the states and federal levels within one week.”
Fowler warned that organisations that evade taxes would be made to face the law in a civil suit in order to collect outstanding arrears and Chief Executive Officers of such organisations could face criminal charges. The meeting, according to Fowler, was to enable the JTB fashion out a roadmap to provide a workable tool for both the FIRS and the Internal Revenue Boards of the states with a view to raising the level of tax revenue in the country.
Justifying the need for a new road-map, he said, “It is my conviction that there are many stones left unturned as far as our current tax administration processes are concerned.” For example, it is common knowledge that the administration of the Value Added Tax, VAT, is greatly hindered by many factors, ranging from in adequate coverage of ‘VATable’ persons to no-remittances of VAT deductions. Tax revenue loss in this aspect can only be imagined.
“I have also identified the fact that there is deficiency on our part as tax administrators in terms of collaboration and cooperation in the areas of exchange of information for tax purposes.”
He said that the FIRS and the state boards would have to work with greater synergy in the areas of conducting joint audit exercises by FIRS and SBIRs; carrying out joint tax enlightenment and enforcement exercises; sharing and exchange of information concerning unremitted taxes identified by either side; embark on joint training programmes and workshop; review and amendments of tax laws and legislations from time to time.
Source: Vanguard
