Buhari orders MDAs to grant FIRS access to tax collection

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President Muhammadu Buhari has mandated ministries, departments, agencies (MDAs) and business enterprises to grant access to the Federal Inland Revenue Service (FIRS) to their systems for the purposes of tax collection nationwide.

President Buhari issued the mandate on Thursday while delivering his address as the Special Guest of Honour at the First Annual National Tax Dialogue organized by the FIRS at the old Banquet Hall, Aso Rock Villa Abuja.

According to a statement by the FIRS Director of Communication and Liaison Dept, the theme of the Dialogue is: “Taxation in a Post-Covid Economy”.

The President also mandated the FIRS to “speedily put all measures in place to fully implement programmes to stamp out Base Erosion and Profit Shifting in all of its ramifications and generally automate its tax processes.”

In addition, President Buhari urged the FIRS to fast-track its digitalization of the tax collection process.

The President said: “I have directed all government agencies and business enterprises to grant FIRS access to their systems for seamless connection.

“We all are now living in a fast digitalising world. As such, business transactions are continually being migrated from ‘brick and mortar’ locations to digital places or spaces.

“It is therefore incumbent upon tax authorities to adopt digital means to efficiently track taxable transactions for the purpose of collecting taxes.

“In order to provide the necessary legislative framework for the adoption of technology in tax administration, we also made necessary amendments to the FIRS Establishment Act in the Finance Act 2020.”

President Buhari assured citizens that the government will continue to pursue its mandate of improving lives through investments in infrastructure projects like railways, roads, electricity, healthcare and education, in spite of dwindling revenues and the challenge of coronavirus.

“Our government has continued to pursue all those projects despite massive decline in government revenues occasioned by a combination of factors among which is the COVID-19 pandemic.

“The devastating effect of COVID-19 on the health and economy of the world is evident across every strata of our society.

“It is obvious to every citizen of this country that our economy is not immune from the global economic downturn.

“As such, we have had to confront the conflicting situations of reflating the economy and at the same time raising revenue to meet our budgetary needs.

“It is within this context that the government undertook an expansive budgetary projection of over N13 trillion for 2021.’’

The President said the government had “inevitably resorted to deficit budgeting as a result of declining revenues for some years,’’ resulting to increase in Nigeria’s debt profile.

“As we might expect, this has led to increase in Nigeria’s debt profile which stood at about N32 trillion in September 2020.

“This funding gap created by the dwindling government revenue therefore underscores the importance of the national tax dialogue we are holding today.

“No nation has ever made progress without having to pay for it or make the necessary sacrifice. I therefore call on all Nigerians to be alive to their tax obligations.

“This government is strategically restructuring the tax revenue mix in favour of indirect taxes in accordance with our national tax policy document.

“To this end, FIRS is mandated to do all that is required in order to efficiently collect tax revenue due from transactions carried out using local and foreign online platforms.

While urging all citizens to play more active roles in nation building by paying their taxes, the President said “the administration is, however, not seeking to increase the tax burden upon the citizens but to plug the existing tax loopholes or leakages and to ensure even and equitable application of the tax laws.’’

According to him, “this was clearly demonstrated by the provisions in the Finance Act 2019 whereby government exempted small companies from tax and reduced the income tax rate for medium companies from 30% to 20%.

“In the Finance Act 2020 which I signed into law at the tail end of 2020, we went further to cushion the burden of tax on the low-wage workers by exempting minimum wage from personal income tax.’’

President Buhari said necessary amendments had been made to the FIRS Establishment Act in the Finance Act 2020 in order to provide the legislative framework for the adoption of technology in tax administration.

“Every Nigerian must see tax payment in its proper context, which is, as a solemn and patriotic obligation that is necessary for building a better society.’’

Also speaking, President of the African Development Bank (AfDB), Mr Akinwunmi Adesina, who delivered the keynote address at the Tax Dialogue, assuranced that the AfDB would support the FIRS to modernise the tax collection processes in Nigeria through capacity building.

In her opening remarks at the Dialogue, Minister of Finance, Budget and National Planning, Mrs Zainab Shamusuna Ahmed, highlighted some provisions of the Finance Act 2020, stating that a number of these provisions were enshrined in the Act in order to help businesses, especially SMEs, recover from the adverse effects of COVID-19.

She said tax compliance was key to national prosperity, stressing that government was determined to minimise the incidence of tax dodging through suck leakages as cross-border transactions through maximum use of technology.

The Finance Minister urged the audience to generously contribute their ideas during the dialogue in order to improve the nation’s tax system.

In his Welcome Address at the event, Executive Chairman, FIRS, Mr Muhammad Nami, underscored the importance of the dialogue, saying: The universal collapse of traditional government revenue sources and the consequential resort to tax is a testimony. The well-known arms race among nations is gradually giving way to “tax-race”.

The international struggle for and against digital services tax is just the beginning of the tax race. It is a race for all nations – developed or developing. And for Nigeria, it is ‘a must-win’ race.”

Mr Nami noted that the FIRS would match on to digitalise the tax process fully and canvassed the cooperation of the three tiers of government, the citizens and corporate organisations in the country for the success of the digitalization drive.

His words: “The FIRS started the journey to automation several years ago when it launched “Project Fact”. Several other initiatives were launched to further take advantage of evolving technology in taxpayer registration, online payment platforms, remote filing of returns, etc. However, there was very limited success with the various initiatives due to inadequate statutory framework.

“A quantum leap was achieved with the 2020 Finance Act which copiously provided legal grounds for deployment of technology in tax administration. The Service is grateful to the President, the leadership of the National Assembly, the Honourable Minister of Finance, Budget and National Planning and all other stakeholders that worked together to enact the necessary laws.

“The Service is taking advantage of the new law to embark on studies (with the assistance of friendly tax authorities and international tax organisations) with a view to developing a robust digitalisation roadmap. The roadmap will enable the Service to digitalise its whole operations (end-to-end) in a systematic, coherent and efficient manner.

“There is so much to look forward to in the coming years. The FIRS is starting this decade with the resolve to leapfrog tax administration into the digital age. Ladies and gentlemen, we are banking on your continued support as we embark on this onerous journey.”

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