FG May Deduct Unremitted Taxes From States’ Monthly Allocation | Independent Newspapers Limited
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FG May Deduct Unremitted Taxes From States’ Monthly Allocation

Posted: Apr 20, 2016 at 6:38 pm   /   by   /   comments (0)
States of the federation that fail to remit various taxes collected on behalf of Federal Inland Revenue Services (FIRS) over the past five years are in for trouble as Federal Government weighs option of enforcing the deduction from their monthly federal allocation.
Babatunde Fowler, FIRS chairman, said less than 20 per cent of the taxes (Value Added Tax, Withholding Tax and CIT) collected by some states were accounted for, adding that “a lot of states never remitted taxes” yet benefit from the monthly federal allocation.
Fowler who spoke at the ongoing Investigative public hearing on ‘FIRS accounting procedure,’ held at the instance of Ad hoc Committee chaired by Michael Enyong Okon (PDP-Akwa-Ibom), unveiled plans to shore-up the country’s revenue by raising the tax base of companies operating in the country from N10 million to N20 million by the end of 2016 fiscal year.
The FIRS chairman added that plans were underway to bring at least 20 million out of the 27.5 million SMEs operating in the country under the tax policy, adding that the Joint Tax Board meeting held recently in Kano State also resolved to increase the tax payers at the state level from 10 million to 20 million into the tax net by May 2016.
He disclosed that 363,000 tax payers have so far been captured into the tax net since resumption, adding that as from May 2, 2016, all federal ministries, departments and agencies (MDAs) are to begin to remit appropriate taxes including VAT and WHT deducted from payment to contractors into the Consolidated Revenue Fund (CRF).
Fowler disclosed that FIRS had so far realised N700 billion VAT out of the N2 trillion for this year, while over 100,000 companies operating across the country have never paid taxes.
The FIRS chairman submitted at the public hearing list of highly indebted companies from various sectors of the economy including airline, telecommunication and construction to the Ad hoc Committee for further legislative action.
To recover the multi-billion unpaid taxes, Fowler said that negotiation had been initiated with major debtors in the aviation, finance, telecom, oil and gas, suppliers of fertilizers and multinationals to ensure prompt payment of outstanding taxes.