MEDIATRACNET
To collaborate on joint tax audit, investigation, and automatic exchange of information, the Federal Inland Revenue Service (FIRS) on Monday signed a Memorandum of Understanding (MoU) with the Lagos Internal Revenue Service (LIRS) to harmonise the processes of the two tax authorities.
The MoU signing ceremony which took place at the State House, Marina, Lagos State, was executed by the Executive Chairman, FIRS, Muhammad Nami, and the Executive Chairman, LIRS, Ayodele Subair, and witnessed by the Minister of State, Budget and National Planning, Clem Agba and the Lagos State Governor, Babajide Sanwo-Olu.
The MoU which establishes a joint FIRS, LIRS Audit and Investigation team imposes on the two tax authorities an obligation to share relevant information that would assist both parties in their tax administration and enforcement roles, while also providing for capacity building between both authorities.
Speaking at the ceremony, the FIRS Chairman noted that the cooperation would enable the two authorities to work as a team to achieve set objectives.
“We will carry out joint audit and investigation as a team. We will also conduct automatic exchange of information for gathering data for the purpose of tax administration. With that information, we would be able to carry out tax administration seamlessly.
“In addition to that, what we are going to introduce administratively, because of our joint operation, is to ensure that we are able to implement a presumptive tax regime as far as issues of tax administration are concerned.
“But that is going to happen after we are done with the regulation we are putting together with the Ministry of Finance, Budget and National Planning, which the Honourable Minister of Finance would issue in due course.
He said the presumptive tax would be for the purpose of Personal Income Tax and also Ground Rent administration in Lagos State.
On capacity building, Nami said there were certain things we know as FIRS and would like to share with the State Inland Revenue Service, adding that there were also areas of specialization the state would be expected to share information with FIRS through capacity building.
The FIRS boss said the major objective of the collaboration was to raise enough funds for Lagos State government and the Federal Government to be able to fund their budgetary requirements.
Nami told the people of Lagos State that “civilisation globally does not happen by accident,” but that “people or citizens of various jurisdictions, states and countries globally make it happen through the taxes they pay.”
He explained that without funds received by the government through taxes, governments all over the world would not be able to provide critical infrastructures such as roads, hospitals, internationally rated airports, schools and be able to cater for security and safety of their citizens.
With this collaboration, he said both the Federal and the State were confident that Lagos State would earn more revenue from taxes, and be able to deliver to Lagosians a 4th Mainland Bridge, a Lekki International Airport — which it has already conceived — and other critical infrastructure.
“I appeal to the Lagos State Government to continue to give Lagosians—particularly taxpaying residents—value for the taxes they pay.”
The Lagos State Governor, Babjide Sanwo-Olu in his remarks stated that this collaboration commenced over a year ago with the intention to improve the fiscal space of the country.
He noted that the country’s tax-to-GDP ratio, at around six to eight percent was unimpressive and unacceptable, stating that other nationals within the Sub-Saharan region are doing better.
“Other nations even within the Sub-Sahara region are doing between 14 to 15 percent. If you talk about developed countries, they are doing 35 to 40% and that is what makes them developed countries because indeed, it is really an avenue for you to support your government and hold them accountable.”
Sanwo-Olu noted that with this collaboration, the State was on track to rise above its N1.7 trillion to within the region of four to five trillion Naira.
The Minister of State, Budget and National Planning, Clem Agba commended the two tax authorities for the landmark agreement, and appealed to other states to follow suit.
