Business - Business & Economy - News - October 22, 2021

FIRS proposes a new tax scheme for road infrastructure funding

MEDIATRACNET

The Federal Inland Revenue Service, FIRS, has proposed for government consideration a new tax scheme that would make the informal sector generate money for the construction of roads infrastructure in the country.

The new Road Infrastructure Tax scheme, the Chairman of the FIRS, Muhammad Nami, said would provide the government adequate funding needed for roads construction, rehabilitation, and maintenance.

The Chairman who spoke while receiving a delegation of the Nigeria Union of Journalists (NUJ), led by its National President, Chris Isiguzo, in his office, in Abuja, said the scheme would also provide the government with the needed security for roads in the country.

Nami said the proposed Road Infrastructure Tax scheme would be administered by the FIRS as a tax incentive for operators in the informal sectors of the economy,

“The only way to make the informal sector contribute to building a modern society is by making them pay when they use the roads,” Nami said.

“That is why we are proposing that government should consider introducing Road Infrastructure Tax in Nigeria,“ he added

He said in many jurisdictions, road users pay for the use of road infrastructure, as such it shouldn’t be seen as an additional burden on our citizens because it has the potential of making life better for all.

Nigeria’s economy presently, he noted, relies heavily on non-oil revenues to discharge its statutory responsibilities of paying salaries and providing social amenities to the citizenry.

Without the tax citizens pay to the governments at all levels, the FIRS Chairman said the government would not be able to fulfill its mandate to the electorates.

“Tax money also helps to ensure the roads you travel are safe and always in good condition,” he said.

Despite the sharp practices by some companies that were in the habit of evading taxes, by shifting their capital and profits to tax havens, as well as low revenue from Petroleum Profit Tax, due to the shortfall in crude oil production, among other factors, he said the FIRS has adopted critical reforms that have yielded a positive impact on the Service’s operations.

“Adopting technology in tax administration is crucial in improving domestic revenue mobilization in view of dwindling oil prices, in order to avoid falling into a debt crisis. It is against this backdrop that the TaxPro-Max became the channel for filing Naira-denominated tax returns effectively from June 7.

“The TaxPro-Max enables seamless registration, filing of returns, payment of taxes and automatic credit of withholding tax as well as other credits to the Taxpayer’s accounts among other features. The technology also provides a single-view to Taxpayers for all transactions with the Service.” Nami explained.

Nami also noted that the FIRS management established two critical units, the Intelligence, Strategic Data Mining & Analysis Department (ISDMA) and the Tax Incentive Management Department (TIMD) as part of institutional reforms to generate more revenue and forestall revenue leakages.

“While the TaxProMax will serve as the flagship tool for mining data, it will be complemented by other tools that the Intelligence, Strategic Data Mining and Analysis Department may deploy, with the data engineers in the Department carrying out necessary distillations.

“Management also established the Tax Incentive Management Department to manage, implement and report on tax incentives as provided by relevant extant laws and regulations.

The TIMD is specifically in charge of the tax affairs of companies/enterprises enjoying tax exemptions and holidays. Companies enjoying Pioneer incentives, Non-Governmental Organizations (NGOs), Cooperative Societies, companies in Export Processing Zones (EPZ), Free Trade Zones (FTZ), Oil and Gas Export Processing Zones (OGEFZ), those engaged in Downstream Gas Utilization and all others enjoying tax holidays are being managed by the TIMD to forestall revenue leakages, such that these companies/enterprises do not use their status as a cover to earn taxable income and refuse to pay tax on such income.” he stated.

Nami said the FIRS created 10 Value Added Tax (VAT), Regional Coordination Offices across the country to drive collection of VAT.

Reviewing the achievements under the reforms, he said this has resulted in the collection of about N4.2 Trillion between January and September 2021, the successful facilitation of ISO 27001:2013 Certification of the FIRS’ Exchange of Information Centre, and the achievement of 114.66 percent of the VAT collection target in the first half of the year.

He said the Service was able to realize the high level of revenue collection as a result of the efficiency and effectiveness of the TaxProMax Solution and intelligence/data gathered, mined and analyzed in the period under review.

“The Service successfully facilitated both the mock and external audits for the ISO 27001:2013 certification of the Exchange of Information (EOI) centre, to meet international information security management standards,” he said.

He congratulated Isiguzo for his recent reelection as the National President of NUJ, saying it was a reflection of his uncommon achievements at the NUJ.

Urging NUJ Members to be constructive in their criticisms of the operations of the Service, Nami enjoined them to always confirm or verify sources and accuracy of information.”

Earlier, the NUJ National President, Isiguzo, said the visit of the union was part of his resolve to engage critical institutions as a key stakeholders in charting a way forward for the country’s collective good.

Describing the FIRS as a vital institution in the country, requiring all the support it needs, especially at a time when the country is security-challenged, adversely affected by COVID-19 and faced with FOREX crisis as well as political intrigues from different parts of the nation.”

Isiguzo said the NUJ has noted closely the FIRS’ “strident efforts to shore up the country’s revenue by deploying technology and the requisite personnel in this regard. Of interest to the Union is your digital technology solution, TaxPro-Max.

“The numbers show that it has assisted in boosting efficiency in tax administration and collection rates across the country.

“However, with your recent admission that only about 44 million out of a possible 100 million-plus that pay tax makes it urgent for a robust integrated media campaign to get more Nigerians into the tax net. This the NUJ is willing to spearhead.”

Isiguzo assured the FIRS Executive Chairman and his management team that NUJ will commend the agency where it has done nobly.

He however noted that the union will not shy away from criticizing FIRS constructively as well as hold it accountable to the Nigerian people, in line with the constitutional guarantee as contained in Chapter 22 of the 1999 Constitution as amended.

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