FIRS clampdown on tax defaulters

The Federal Inland Revenue Service (FIRS) has said it would go after multinational companies, corporate organisations and individuals who are evading payment of taxes in the country. The move is part of renewed efforts by the agency to boost revenue to fund programmes of the federal government. Reports show that out of the 450,000 companies […]

The Federal Inland Revenue Service (FIRS) has said it would go after multinational companies, corporate organisations and individuals who are evading payment of taxes in the country. The move is part of renewed efforts by the agency to boost revenue to fund programmes of the federal government. Reports show that out of the 450,000 companies in Nigeria, only 125,000, representing 27.7 per cent of taxes. The figure implies that about
325,000companies are evading tax, thus denying the government huge revenue annually. In 2015, the  FIRS was given a revenue generation target of N4.5 trillion by the federal government and it has so far generated only N2.66 trillion. Past heads of the Service had complained that it was difficult to track financial activities of people who do not pay taxes. Also speaking last week, former governor of Lagos State, Babatunde Fashola, lamented that out of about nine million people employed in the state, it was only half of that population; 4.5 million that are actually paying taxes used to run the state. But acting Executive Chairman of FIRS, Babatunde Fowler, in his first official meeting with the staff vowed to ensure that all tax revenues due to the government are recovered from all tax payers. He warned that his administration will not take the issue of tax evasion lightly. He added that some foreign companies that were operating in Nigeria were being investigated in England for evading taxes. He said: “No country can succeed without taxation. We will make sure that we cover all grounds, especially on the corporate level; all tax payers within each state will be covered”.  It is unfortunate that individuals and corporate organisations have to be reminded to pay their taxes. Ordinarily, nobody should be prompted to pay taxes; every tax payer must see it as a duty and anything short of that amounts to robbing the country. Often, Nigerians complain of lack of basic social amenities; how can government provide these amenities, if taxes are not paid. It is only when a citizen performs his/ her obligation that he will have the moral right to demand same from government.  That lackadaisical attitude has also created a favourable environment for corrupt officials to loot, because when individuals pay taxes, they would monitor their money and ensure that they are appropriated properly. We therefore urge all Nigerians to pay their taxes, Justas corporate organisations, both local and international need not be told to pay their taxes. They should not see Nigeria as a fertile ground where they can set up business ventures, make profit and not pay taxes.  They must understand that it is obligatory to do so and that anything short of that is a criminal offence. The FIRS should also revert to its rules and sanction defaulters. Companies that refuse to pay taxes should be shut down to serve as deterrent to others. Not too long ago, the Service introduced what it calls Tax Identification Number (TIN) which citizens are supposed to tender before accessing certain amenities. We urge the FIRS to ensure proper implementation of that policy. Anyone who fails to provide it should be denied certain services to drive home the seriousness of the exercise.   Also, the Director, Communications and Liaison Department, FIRS, Mr. Emmanuel Obeta, at an event, said in a bid to capture companies with the tax net, the Service is currently discussing with the Corporate Affairs Commission (CAC)to make it mandatory for the companies to obtain their Tax Identification Number at the point of registration.  We encourage such partnership as it will also enable the FIRS to have an authentic list of existing companies. The CAC should also tighten its system so that people don’t just register companies and abandon them after a short period. It is also common knowledge that some companies are only registered for contracts and once such contracts are executed, they seize to exit. Efforts should be made to discourage the practice so that FIRS can keep track of all companies. Worthy of note is the fact that under the present head of the Service, Lagos State recorded huge success in its tax collection drive.
We urge him to bring that experience to bear at the national level, so that monies due to the country are remitted.  We urge the authorities to also block all leakages; because it is one thing to collect the taxes and another to ensure that they get to the appropriate quarters. With the dwindling revenue from the federal government, states also do not have a choice but to look inwards and generate revenue. One way to go about such is to sharpen their tax collection drive. Machineries should also be put in place at the states level to ensure that citizens pay their taxes.