Business

FIRS to leverage 2021 Financial Act in generating revenue for Federal Government

BY JOHNMARK UKOKO

 

The Federal Inland Revenue Service (FIRS) has revealed that it will the  Finance Act 2021 through collaboration with taxpayers and key  stakeholders to ensure adequate funding of the country’s budget and
generate higher revenues for national development. While delivering the keynote address at the KPMG’s webinar on the  2022 Budget and the Finance Act 2021, Executive Chairman of FIRS, Muhammad Nami, noted that the Act had provided a framework for equitable  laws, automation and deployment of Information and Communication Technology (ICT) infrastructure, a single agency for tax collection and taxation of the digital economy among other critical interventions for  improved tax administration in the country.

 

He said: “In the past, situations abound where certain goods or  services steamed into Nigeria by non- resident companies especially to  consumers were not subject to Value Added Tax (VAT). This raised the  issue of equity, as goods and services offered by domestic companies are  subject to VAT.

 

“With the amendment of section 10 of the VAT Act and our publication of  the guidelines on simplified VAT compliance regime for non-resident  suppliers: there is now a mechanism for applying VAT on such goods or  services, affording the same tax treatment to local and foreign  supplies.

 

“Similarly, companies derived income from Nigeria without physical  presence can now be assessed, like other companies with physical  presence on fair and reasonable percentage of their turnover in line
with section 30.” On automation of tax processes, the FIRS boss noted that with the  amendment of section 25 of the FIRS Act, the service could now deploy  either proprietary or third party developed technologies for tax
administration.

 

“Those that may still stand in the way of achieving and this  objective will now be liable to a daily penalty of N25, 000. With the  extension of secrecy and confidentiality requirements to other persons,  like service providers, vendors and consultants of the service, the fear  of taxpayers, are further allayed on the secrecy and confidentiality of
their commercial and other information.

 

Mami further noted that with amendment to section 68 of the FIRS  Establishment Act by the Finance Act, compensation from taxpayers about  multiple agencies of government demanding payment of tax from them had been addressed. “This unfortunate situation is not in line with the national tax  policy thrust and was causing confusion for our tax payers and  increasing their cost of compliance.

 

However, the amendment to section 68 of the FIRS Act by the Finance Act  2021 has made it clear that FIRS is the only agency responsible for tax  assessment, collection and enforcement, as such tax payers are expected
to streamline tax administration regime going forward.

 

He added that the service would deploy compliance and enforcement  strategies, leverage intelligence and strategic data mining and analysis  to provide intelligence and information to enhance its audit  investigation function, while also reducing the prevalence of tax abuses  in the country.

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