The Federal Inland Revenue Service (FIRS) has explained why Nigeria is suffering revenue losses
In a statement by the FIRS in Abuja yesterday, the Executive Chairman of the FIRS, Mr. Muhammad Nami attributed the major cause of tax revenue losses in Nigeria to “fragmented tax systems and agencies.”
According to Nami, in Nigeria we have 774 Local Governments, each of them has a tax authority; each of the 36 states, too, has revenue authorities with their respective mandates; then we have the FIRS and Customs”.
The FIRS boss then advised the government that to promote efficiency and act according to global best practices, “we should amend our tax laws to harmonise the tax agencies and tax system”.
“With this, when the FIRS, for instance, visits ‘Company A,’ it can serve one assessment on the company, and also on the individual that owns the company; it can also ask the company to account for the VAT it has collected, and ask for PAYE it has deducted from its employees as well as the Personal Income Tax of the promoters of the company. This is not the case, and as such, has created a huge gap in our tax system.”
Nami described the Road Infrastructure Tax Credit Scheme as “one of the greatest innovations of the Federal Government in its resolve to tackle Nigeria’s infrastructure deficit”.
He stated that the scheme “provides for public-private partnership intervention in the construction, refurbishment and maintenance of critical road infrastructure with participants being entitled to Tax Credits against their future Companies Income Tax”.
The NNPCL, through its subsidiary, he said, “is investing in about 1,824 kilometres of roads across the six geopolitical zones in Nigeria”.
Speaking on the Road Infrastructure Tax Credit Scheme, the Minister of Finance, Budget and National Planning Mrs. Zainab Ahmed, has clarified that the Federal Government only gives tax credit to companies that completed work on road projects assigned to them and not before.
According to the minister, “the tax credit was only provided to the beneficiaries after completion of the construction work, and not before”.
Mrs Ahmed noted: “Several companies had indicated interest in carrying out construction and rehabilitation of roads under the scheme across the country”.
She added : “While some of these companies had commenced work, others were yet to as they were still finalising on some of the documentation requirements such as Bill of Quantities”.
