Business - Business & Economy - News - September 23, 2022

FIRS warns MDAs against outsourcing tax services to consultants

By Bassey Udo

Outsourcing the collection of taxes due to the Federal Government or any of its agencies to consultants and concessionnaires is infringing on the mandate of the Federal Inland Revenue Service (FIRS), government Ministries, Departments and Agencies of Government (MDAs) have been told.

The tax agency in a Public Notice on Thursda, signed by its Chairman, Muhammad Nami, frowned at MDAs against the practice of appointing consultants and concessionaires to collect taxes on their behalf.

Nami accused some MDAs of usurping part of FIRS functions, including assessment, collection, accounting and enforcement of taxes and levies in their agreements with concessionaires and consultants.

He reminded MDAs that the FIRS was the sole agency of government saddled with the responsibility of tax collection and performance of those functions.

“It has come to the notice of the Federal Inland Revenue Service that some Ministries, Departments and Agencies of Government (MDAs) are appointing concessionaires or consultants for the assessment, collection, accounting or enforcement of taxes and levies due to the Federal Government or any of its agencies.

“Some MDAs include such functions in their agreements with concessionaires or consultants,” Nami said in the public notice.

Citing Section 68(2) of its Establishment Act, the FIRS Chairman highlighted the responsibilities assigned to the tax agency by law as “the primary agency of the Federal Government of Nigeria responsible for the administration, assessment, collection, accounting and enforcement of taxes and levies due to the Federal Government or any of its agencies, except as may be authorised by the Minister responsible for Finance by regulation as approved by the National assembly”.

The Notice also stated that while Section 12(4) of the FIRS Establishment Act has provided that the Service may engage consultants, accountants or other agents to carry out certain functions on its behalf, the law expressly prohibited the carrying out of assessment and collection of taxes by consultants.

The provisions of the law is that: “The Service may appoint and employ such consultants, including tax consultants or accountants and agents to transact any business or to do any act required to be transacted or done in the execution of its functions under this act; provided that such consultants shall not carry out duties of assessing and collecting tax or routine responsibilities of tax officials”.

Going by the provisions of the law, the FIRS said it was clear that the duty of administration, assessment, collection, accounting or enforcement of taxes and levies due to the Federal Government or any of its agencies was that of the Federal Inland Revenue Service and its tax officials.

“No part of these responsibilities can be contracted to a private enterprise by any other MDA,” the notice insisted.

The Chairman FIRS further cautioned MDAs indulging in the business of appointing consultants for tax assessment and collection that they were not just acting against the letters of the law, but were committing offences that were punishable under the FIRS Establishment Act as amended.

“Furthermore, appointment or authorisation of any person, other than by the Federal Inland Revenue Service, to assess, collect, enforce or account for taxes constitutes an offence under Section 68(3) of the FIRSEA. Such appointment or authorisation is punishable, upon conviction, with fine, imprisonment or both under Section 68(6) of the Act.

“In view of the foregoing, where any person, individual or corporate, has any information or assistance that may be of use to the Service for the purpose of administration, assessment, collection, accounting or enforcement of taxes and levies due to the Federal Government or any of its agencies or for the performance of its duties under the FIRSEA, such person should approach the Service directly with such useful information,” the public notice said.

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