Tax Drive: FIRS Unveils New assignment Regime to Prove Big Firms
By Johnmark Ukoko
The Federal Inland Revenue Service (FIRS) has unveiled a new assessment regime to determine the tax ranges of the companies before they file their returns, as the agency has been authorised to plug into big companies’ database to access their performances.
The tech driven onsite assessment involve the attachment of FIRS’ software to the companies’ database.
This will allow the agency to a certain the right value of taxes to collect from such institutions before tax fillings.
Section 25 of the FIRS establishment Act (as amended) under the Finance Establishment Act 2021 gives power to the agency to deploy proprietary or third party technology for tax administration. This includes Tax assessment and information gathering from taxpayers.
Accordingly, where the service desire for the purpose of assessment access to any taxpayers’ database, it would give a 30 days notice to the taxpayer requesting that such access be granted.
Failure to grant access is considered an offence under the law and subject to an administrative penalty of N25, 000 for each day the failure continues
The new assessment regime is a major highlight of an aggressive push for efficient tax assessment and collection as Nigeria races to increase its tax income.
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It would be recalled that the 2022 budget indicates deficit of 37 per cent with projected non-oil taxes such as Company Income Tax and Value Added Tax (VAT) of N1.22 trillion.
Olufemi Babem, Tax Regulatory and People Services partner at KPMG Nigeria confirmed the new FIRS initiative recently in Lagos.
He spoke during the Economic Impact of Government’s tax Revenue drive at the virtual Nairametric 2022 Economic outlook in Lagos recently, saying the law requires companies to register for tax and file their audited accounts and tax computation with FIRS within six months after incorporation.
Babem disclosed that the implementation of the new tax plan is already taking place in key sectors such as manufacturing, banking, housing, oil and gas, insurance, Telecommunications, sectors among others.
He noted that the implementation of the Finance Act 2021 has made the new policy plan actionable by giving more powers to FIRS to collect taxes for the nation.
“It would be an on-site attachment of tax software to targeted companies database. The government is also looking at big digital companies with remittance Netflix has notified companies to add VAT to its payment,” he stressed.