MEDIATRACNET
Persons and corporate bodies disputing tax claims by the Federal Inland Revenue Service (FIRS) are henceforth to pay 50 percent of the assessed tax into an interest-yielding account of the Federal High Court before the court can hear such matters.
Chairman, FIRS, Muhammad Nami, announced this on Friday in Abuja during a public hearing by the House of Representatives Committee on Public Accounts investigating revenue leakages arising from tax waivers and incentives to foreign companies granted pioneer status.
Nami said the new rule is contained in a recent Practice Direction issued by the Chief Judge of the Federal High Court, Abuja, Justice John Terhemba Tsoho, under Order 57 rule 3 of the Federal High Court (Civil Procedure) Rules, 2019.
The FIRS Chairman also confirmed that the Practice Direction took effect from May 31, 2021.
Also, Nami said the Management of FIRS “has initiated a process for a Memorandum of Understanding (MoU) with critical stakeholders as far as information sharing and amendments to the relevant laws are concerned”.
“We have gotten several amendments to our tax laws which require companies operating in the Free Trade Zones to file tax returns on their operations to the FIRS,” Nami said.
“These amendments are aimed at checking the activities of taxpayers currently taking advantage of some gaps in our tax laws and fiscal policy by establishing businesses in the nation’s tax-free zones,” he said.
Such companies, he said, produce goods meant for export and then sell the goods to our Custom’s zone, thereby making it impossible for the companies operating in our Custom’s zone to operate competitively with them.
However, as part of efforts to attract investment vis-a-vis raising revenue for the government, Nami also hinted that as a first step, “FIRS has set up a high-powered committee made up of senior officials of FIRS and the National Investment Promotion Commission (NIPC) to look into issues pertaining to tax waivers and granting of pioneer status”.
Nami, who maintained that tax evasion and tax avoidance were global phenomena, also said that such practices were equally fiscal policy issues.
He then urged the National Assembly to, as a second step, amend the relevant tax laws that would make it almost impossible for these companies to exploit loopholes in our tax laws to shift both profits and taxes to their countries of origin.
He noted that taxes not paid to Nigeria or waived by the Nigerian Government are returned to the treasury of defaulting companies’ home countries operating in Nigeria, hence the need for legislation to address the issue.
