FEC Approves N14.88bn For Construction Of FIRS Office

Osinbajo presides over FEC meeting

 

The Federal Executive Council has approved a contract for the construction of a new office block and parking lot worth over N14.88 billion for the Federal Inland Revenue Service (FIRS).

The Minister of State for Budget and National Planning, Clement Agba, disclosed this on Wednesday after the Council meeting presided over by Vice President Yemi Osinbajo at the State House.

Ogba told State House Correspondents that the Construction of the 12 storey building would save FIRS N4 billion annual rent and decongest traffic along Awolowo Road.

The Council also approved the creation of a database of the National Capital Projects Information System of Government, to track the growing abandoned and uncompleted projects across the country, particularly in the last five years, which drains national funds.

The National Capital Projects and Information System, which involves key infrastructure ministries, is to be headed by the Finance Minister to prioritize and fund selected projects on a yearly basis and possibly privatize some of the projects, repurposed some for alternative use, and completely abandon others (depending on the outcome of investigations) treating them as a sunk cost.

Meanwhile, the Minister of Agriculture, Mohammad Abubakar, has stated that the government is working to decrease the inflation rate, primarily through subsidizing fertilizer, improving production, and preventing smuggling among other strategies.

He again debunked claims that the nation would experience a food shortage in 2023.

NNPC’s Failure To Remit Funds Has Plunged Many States Into Distress – El-Rufai

A file photo of Kaduna State Governor, Nasir El-Rufai.

 

Amidst the nation’s dwindling economy, Governor Nasir El-Rufai of Kaduna State has lamented that the inability of the Nigerian National Petroleum Company (NNPC) Limited to remit any revenue into the federation’s account since the beginning of this year has put many states into severe financial distress.

El-Rufai raised the concern at the 2022 Tax Dialogue organised by the Kaduna State Revenue Service held in the state capital on Monday.

He said the federal and state governments now rely on revenues and taxes generated by the Federal Inland Revenue Service and Nigerian Customs Service for survival.

According to him, the situation has led to the inability of most states to pay salaries and fulfil their social contract to citizens.

READ ALSO: ‘Are We Drinking The Petrol?’: Sanusi Queries 66m Litres Daily Fuel Consumption, Wants NNPC Disbanded

Also speaking at the event, the Executive Chairman of Federal Inland Revenue Service (FIRS), Muhammad Nami emphasised the importance of tax dialogue as a tool for engendering tax compliance and a means of strengthening tax systems.

While emphasising the importance of dialoguing on tax payment, the Director General of Nigerian Maritime Administration and Safety Agency (NIMASA), Bashir Jamoh also stressed the need for inclusivity, fairness and pooling expert ideas to aid tax policy formulation and administration.

According to them, tax authorities must create effective communication and trust strategies and also ensure taxpayers receive value for taxes paid, which are the two key drivers of voluntary tax compliance.

Last month, El-Rufai said the Federal Government has failed in the oil and gas business and should get out of the sector.

He said nothing has changed with the commercialisation of the NNPP in July 2022, adding that NNPC is Nigeria’s biggest problem and should be privatised.

“This year, NNPC has not brought N20,000 to the federation account. We are living on taxes. It is PPTs, royalties, income tax and VAT that is keeping this country going because NNPC claims that subsidy has taken all the oil revenues. I don’t believe it,” El-Rufai noted.

Online Betting: FIRS Deducts Taxes At Transaction Points, Gives Operators Dec 31 Deadline

File photo of FIRS Chairman, Muhammad Nami.

 

The Federal Inland Revenue Service (FIRS) has commenced the deduction of taxes at transaction points from Online Gaming Transactions using the Sentinal National Payment Gateway and Electronic Solution.

In a Public Notice signed by its Executive Chairman, Muhammad Nami, the Service directed full compliance by the online gaming community.

The chairman explained that the Sentinal National Payment Gateway was a transaction processing system that enables Integrated Payment Services Providers to deduct taxes at the points of transaction and immediately remit the tax deducted to the government’s treasury.

The FIRS also noted that all operators offering online gaming services in Nigeria, not later than the 31st of December 2022, were required “to connect to the Sentinal National Payment Gateway, deduct tax from online gaming transactions and remit same directly to the relevant government’s treasury.”

“The FIRS is automating the administration of tax on online gaming using Sentinal National Payment Gateway and Electronic Solution.

READ ALSO: CBN To Redesign N200, N500 And N1,000 Notes

“Sentinal National Payment Gateway is a transaction processing system that enables Integrated Payment Service Providers to deduct taxes at transaction-points and remit the tax deducted directly to government’s treasury.

“The deployment of Sentinal National Payment Gateway will simplify tax compliance for companies engaged in online gaming activities,” the notice read, according to a statement on Wednesday by Nami’s aide, Johannes Wojuola.

The notice stated that though it was not mandatory for online gaming operators offering online gaming services from outside Nigeria to be incorporated in Nigeria, they are compelled by extant tax laws to connect to the Sentinal National Payment Gateway for the purposes of dedicating tax from the gaming transactions of players in Nigeria, and remitting same directly to the government purse.

FIRS Generates Record N6.4trn Revenue In 2021

File photo of FIRS Chairman, Muhammad Nami.
File photo of FIRS Chairman, Muhammad Nami.

 

The Federal Inland Revenue Service (FIRS) has generated a record N6.4 trillion as revenue in 2021, the highest in its history.

This year’s revenue collection exceeded that of 2019 when the agency raked in N5.3 trillion under the administration of Babatunde Fowler.

Spokesman to FIRS Chairman, Oluwatobi Wojuola, who disclosed this via a statement issued on Thursday said that despite the limitations faced in 2020 and 2021, the service achieved over 100 percent of its collection target.

READ ALSO: Oil Price Tops $90 Per Barrel For First Time Since 2014

“The FIRS, in the year 2021 collected a total of N6.405 trillion in both oil (N2.008 trillion) and non-oil (N4.396 trillion) revenues as against a target of N6.401 trillion,” Nami said.

“Companies Income Tax amounted to N1.896 trillion; Petroleum Profits Tax amounted to N2 trillion; Value Added Tax amounted to N2.07 trillion; Electronic Money Transfer Levy amounted to N114 billion; Earmarked Taxes amounted to N208.8 billion; among others.

“Non-oil sector contributed 69 percent of the total collection in the year, while oil sector’s contribution was 31 percent of the total collection.

“The Service issued certificates for the sum of N147.8 billion tax credit to private investors and NNPC for road infrastructure under the Road Infrastructure Development Refurbishment Investment Tax Credit Scheme created by Executive Order No. 007 of 2019.”

Wojuola stated that in line with the law, 2021 income tax revenue was a function of the outcome of business activities in 2020.

“In that year, the country entered into a second economic recession within 5 years. The recession was occasioned by 5-months of lockdown caused by the Coronavirus pandemic.

“To compound the economic challenges of COVID-19 pandemic, business activities were disrupted by the End-SARS protests.”

Igbos Have Not Had Their Share Of The ‘National Cake’ – Governor Umahi

A file photo of Ebonyi Sate Governor, Dave Umahi. Sodiq Adelakun/Channels Television
A file photo of Ebonyi Sate Governor, Dave Umahi. Sodiq Adelakun/Channels Television

 

Governor Dave Umahi of Ebonyi State says Igbos have not had their share of the “national cake” and as such the South East must turn from calls for restructuring to demands for an economic commission for the region.

Dr Umahi made this assertion on Tuesday in Abakaliki while inaugurating the new leadership of the South-East Traditional Rulers Council, headed by Charles Mkpuma, the Chairman of the council in Ebonyi.

“We shout restructuring as Ndigbo; we should rather be talking about having the South East Economic Commission (SEC) to develop our abilities, to develop our comparative advantages.

“We have not had our own share of the national cake.  We should have that,” Umahi stated.

The governor, while noting that a push for SEC went through the past National Assembly but was not established, urged Igbos to raise their voices to see that the issue is brought back.

According to him, when such a commission is established for the region, then the much desired development would come and Igbo people will then benefit appropriately and immensely from the nation’s resources.

READ ALSOAppeal Court Reserves Ruling On Lagos Govt’s Application For Joinder Over VAT Dispute

[VAT Dispute] Umahi Begs Governors To ‘Sheathe Their Swords’

Speaking again on the issue of restructuring, Governor Umahi reiterated his stand, saying what is needed is “administrative restructuring”.

He explained that his proposed style of restructuring will see more power seceded to the states.

Dr Umahi’s latest take on the highly debated issue comes a few days after the Ebonyi State governor stated that he will only agree to restructuring if it means that states, which are very weak, are taken care of before everyone is given liberty to control their resources.

While wading into value-added tax (VAT) tussle, Umahi said he supports the collection and sharing of VAT by the Federal Government.

The governor argued that it is not yet time for states to take charge of the VAT they generate.

VAT Dispute: Lagos Applies To Be Co-Respondent In Appeal Filed By FIRS

 

The Lagos State Government on Friday applied to be joined as a co-respondent in the appeal filed by the Federal Inland Revenue Service (FIRS) against the judgement of the Rivers State High Court, which declared that the Rivers State Government had the right to collect Value-Added Tax (VAT) and Personal Income Tax in the state, and not the Federal Inland Revenue Services.

Attorney-General of the state, Moyosore Onigbanjo, made the request at the Court of Appeal in Abuja on behalf of the state government.

Onigbanjo told the court that the state’s interest was at stake, stressing that if they aren’t joined in the matter, it would amount to a breach of fair hearing.

He urged the court to take the application for the joinder first before the FIRS’ application for a Stay of Execution of the judgement of the Rivers State High Court.

The Counsel to the FIRS, Mahmud Magaji SAN, however, urged the court to hear the main application (stay of execution request) first, as that was of utmost priority.

Subsequently, the head of the three-man panel, Justice Haruna Tsammani, stepped down the matter for ruling.

At the resumed session, the court ruled that the motion of joinder by the Lagos State government be heard.

Thereafter, the applicants and respondents were given two days to file their written addresses, while the applicants were also given a day to reply on the point of law.

A Federal High Court in Port Harcourt had on September 6 dismissed an application by the FIRS, seeking to stop the Rivers State government from enforcing the Rivers State High Court judgement vesting the power to collect Value Added Tax, VAT, within Rivers State on the state government and not FIRS.

The FIRS had, through a motion on notice, applied for a stay of execution on the earlier judgement delivered by Justice Stephen Pam, affirming the constitutional role of the state governments to collect VAT and not FIRS.

36 States Sue FG Over Stamp Duty

 

The 36 state governments have sued the Federal Government over its alleged failure to remit funds generated from stamp duties into the state accounts.

The states, through their Attorneys-General, are contending that they, and not the Federal Government should collect the stamp duties.

In a suit filed before the Supreme Court on Thursday, they asked the court to determine whether or not they are the sole authority to administer and collect stamp duties on all transactions involving individuals and persons within their respective states.

They have also asked the court to ascertain whether or not they are entitled to 85% of all stamp duties collected on electronic money transfer levy, on electronic receipts or electronic transfers for money deposited in deposit money banks and financial institutions.

Read Also: I Will Do My Best To Ensure That Hardworking Nigerians Succeed – Buhari

The states also asked for “a declaration that the defendant is not entitled to collect, administer, or keep the proceeds of any stamp duties on transactions involving individuals within the respective states of the plaintiffs or any manner interfere with the Plaintiff’s right and authority in the administering the provision of Section 4(2) of the Stamp Duties Act Cap. S8 Laws of the Federation of Nigeria.

“A declaration that the plaintiffs are entitled to all the sums of money collected by the defendant as stamp duties through whatever source or means in their respective states from 2015-2020 and thereafter till the time of the judgment of this honourable court with respect to individual persons’ transactions,” the Statement of Claims, read in part.

This comes amid the conflict between some states and the Federal Inland Revenue Service (FIRS) over the collection of Value-Added Tax (VAT).

The Supreme Court is, however, yet to fix a date for the matter to be heard.

 


VAT: FIRS To Appeal Rivers Court Judgement

A file photo of the Federal Inland Revenue Service (FIRS) office in Abuja. Photo: Twitter- @firsNigeria

 

The Federal Inland Revenue Service (FIRS) on Wednesday said it has appealed the judgement of the Federal High Court in Rivers which held that the agency does not have the right to collect Value Added Tax (VAT) in the state.

In a news conference in Abuja, FIRS Group Lead, Special Tax Operations, Matthew Gbonjugbola, said it is the exclusive right of the agency to collect VAT in the country.

Gbonjugbola explained that the law mandating the FIRS to collect VAT seeks to protect businesses from multiple VAT.

“I can confirm to you that FIRS indeed approached an appellate court to review the judgement of the lower court at the Federal Court of Appeal in Rivers,” he said.

“Be assured that FIRS has filed an appeal and that one is in process and that is why we are not able to speak.”

READ ALSO: Court Refuses FIRS Application To Stop Rivers Govt From Collecting VAT

Speaking further, Gbonjugbola said VAT collection cannot work at the sub-national level, maintaining that the FIRS is empowered by law to do so.

The FIRS official also dismissed purported plans by the agency to tax social media in Nigeria.

This is coming days after a Federal High Court in Port Harcourt delivered a judgment restraining the FIRS from collecting VAT and personal income tax in Rivers State.

VAT is a consumption tax paid when goods are purchased and services are rendered. It is charged at a rate of 7.5 percent.

Wike Orders Rivers Agency To Fully Enforce VAT Collection

 

Rivers State Governor, Nyesom Wike, has ordered the Rivers State Revenue Service (RSRS) to fully implement the State Value-Added Tax Law 2021 which he assented to recently.

This follows the failure of the Federal Inland Revenue Service (FIRS) to stop the state government from collecting VAT, having filed an application at a Federal High Court in Port Harcourt, the state capital.

“With today (Monday’s) judgement, the way is now clear for the administration and enforcement of the Rivers State Value-Added Tax Law 2021 across the entire state until otherwise decided and set aside by the superior courts,” the governor said in a statewide broadcast on Monday, hours after the court refused the suit by FIRS.

READ ALSO: Court Refuses FIRS Application To Stop Rivers Govt From Collecting VAT

“Consequently, I hereby direct the Rivers State Revenue Service (RSRS) to ensure the full and total implementation and enforcement of this law against all corporate bodies, business entities, and individuals with immediate effect.

“Let me warn that the Rivers State government is fully in charge of the state and will not tolerate any further attempt by the FIRS to sabotage or undermine our authority to freely administer our tax and other related laws in our own state. Those who play with fire risk having their fingers burnt; enough of the shenanigans.”

Governor Wike also directed all corporate bodies, business entities, and individuals in Rivers to willingly, truthfully and promptly comply with their tax obligations under the law.

He warned that those who fail in such responsibilities risk sanctions, including having their business premises sealed up by the government.

‘We Did No Wrong’

A file photo of Rivers State Governor, Nyesom Wike.
A file photo of Rivers State Governor, Nyesom Wike.

 

The governor assured residents that his administration would effectively use the expected proceeds from the collected tax to accelerate the development of the state and improve their well being.

He explained that the enactment of the VAT law followed a recent judgement of the court that upheld the constitutional right and authority of state governments to impose, collect, and utilise VAT within their respective territorial jurisdictions.

“As expected, the Federal Government, through the Federal Inland Revenue Service (FIRS), disagreed and filed an appeal coupled with a request for stay-of-execution of the judgment before the Federal High Court.

“While the appeal was pending and without any stay-of-execution of the subsisting judgement, the FIRS went about to bully corporate bodies and business entities from paying the VAT to the Rivers State government, even when they knew that an appeal does not serve as a stay, neither was there anything to stay in a declaratory judgement,” Governor Wike said.

“As a mere agency of the Federal Government without any political authority, the effrontery and impunity exhibited by the FIRS against the Rivers State government were ill-advised and highly provocative.”

He stated that the government had decided to suspend the enforcement of the VAT Law pending the outcome of the FIRS’s application for stay-of-execution.

According to the governor, the state did no wrong in exercising its legal right under a constitutional democracy to stop the continuing breach, denial, and curtailment of the constitutional right of states to lawfully impose and collect value-added and other related taxes within their jurisdiction.

He said the objective of such action was to contribute to the advancement of fiscal federalism by enabling the federating states to explore their potential and capacity for generating greater internal revenues.

Governor Wike, however, admitted that some states with presently low economic activities and ethically restrictive social policies with economic implications may be adversely affected for now.

“Above all, fiscal federalism remains the right path to economic self-reliance and sustainability for all our states and the benefits derivable from this case by all the states in the long run far outweigh the immediate revenue loss that some states may presently suffer,” he said.

Prior to the governor’s broadcast, Justice Stephen Dalyop Pam refused the application by FIRS, seeking to stop the Rivers State government from collecting VAT.

He held that the revenue agency failed to file an application to set aside the tax law recently enacted by the Rivers State House of Assembly and signed by Governor Wike on August 19, therefore, the state law on VAT was valid and subsisting.

Court Refuses FIRS Application To Stop Rivers Govt From Collecting VAT

A file photo of a court gavel.
A file photo of a court gavel.

 

Justice Stephen Dalyop Pam of the Federal High Court in Port Harcourt, Rivers State on Monday refused an application by the Federal Inland Revenue Service (FIRS), seeking to stop the Rivers State Government from collecting Value Added Tax (VAT).

The Federal Inland Revenue Service filed the application in mid-August against the judgment of the same court which had on August 9 ruled that the Rivers State Government, and not the Federal Inland Revenue Service, is entitled to collect Value Added Tax and Personal Income Tax in Rivers State’s territory.

The judgment was delivered in a suit filed by the Attorney General of Rivers State against the Federal Inland Revenue Service and the Attorney General of the Federation.

Not satisfied with the judgment, the FIRS approached an Appeal Court to challenge the ruling.

While the appeal was yet to begin, the revenue collection agency returned to the same Federal High Court in Port Harcourt to seek a stay of execution on the court’s decision, pending the determination of their appeal.

In delivering his ruling on the application by the FIRS, Justice Stephen Dalyop Pam says FIRS failed to file an application to set aside the Rivers State Tax Law of 2021 which was recently enacted by the Rivers State House of Assembly and assented to by Governor Nyesom Wike on August 19, therefore the state law on Value Added Tax is valid and subsisting.

The judge also ruled that the Federal Government already has a huge liability arising from the many years it has collected the tax on behalf of Rivers State, therefore it may be a difficult task for the Federal Government to refund the state if his judgment authorizing the state to collect the tax is upheld at the appellate courts.

The judge believes that Rivers State can easily remit whatever amount it may have received within the litigation period to the Federal Government if it loses at the Appeal Court.

While the Counsel to the Rivers State Government hailed the ruling, the lawyer to the Federal Inland Revenue Service is hoping to get favourable judgment at the Appeal Court.

READ ALSO: Tax Evasion Appeal: Tribunal Orders Multichoice To Pay FIRS N900bn Deposit
Wike Threatens Fresh COVID-19 Lockdown In Rivers

Doing ‘No Wrong’

A file photo of Rivers State Governor, Nyesom Wike.

 

Meanwhile, Governor Nyesom Wike has ordered the Rivers State Revenue Service (RSRS) to fully implement the State Value-Added Tax Law 2021 which he assented to recently.

The governor gave the order in a broadcast, hours after the judgement.

“With today’s (Monday’s) judgement, the way is now clear for the administration and enforcement of the Rivers State Value-Added Tax Law 2021 across the entire state until otherwise decided and set aside by the superior courts,” he said, maintaining that the state did no wrong in exercising its legal right under a constitutional democracy to stop the continuing breach, denial, and curtailment of the constitutional right of states to lawfully impose and collect value-added and other related taxes within their jurisdiction.

“Consequently, I hereby direct the Rivers State Revenue Service (RSRS) to ensure the full and total implementation and enforcement of this law against all corporate bodies, business entities, and individuals with immediate effect.

“Let me warn that the Rivers State government is fully in charge of the state and will not tolerate any further attempt by the FIRS to sabotage or undermine our authority to freely administer our tax and other related laws in our own state. Those who play with fire risk having their fingers burnt; enough of the shenanigans.”

Tax Evasion Appeal: Tribunal Orders Multichoice To Pay FIRS N900bn Deposit

A file photo of a court gavel.
A file photo of a court gavel.

 

The Tax Appeal Tribunal sitting in Lagos has ordered Multichoice Nigeria Limited to pay the sum of N900 billion as deposit, Federal Inland Revenue Service (FIRS) said on Wednesday.

FIRS spokesman, Dr Abdullahi Ahmad, explained that the money was 50 per cent of the N1.8 trillion which the revenue had determined through a forensic audit to be the amount in taxes that Multichoice – owners of DSTV – failed to pay to the Nigerian Government in past assessment years.

According to him, a five-member Tax Appeal Tribunal (TAT) led by its Chairman, Professor A.B. Ahmed, issued the order following an application to it by the counsel to FIRS.

“The FIRS counsel made the application under Order XI of the TAT Procedure Rules 2010 which enables a party to make an application at any stage of the proceedings,” Ahmad said.

“Counsel to FIRS drew the attention of the Tribunal to Paragraph 15(7) of the Fifth Schedule to the Federal Inland Revenue Service (Establishment) Act 2007 and urge the Tribunal to direct Multichoice Nigeria Limited to deposit with the FIRS 50 per cent of the amount of the Assessment under Appeal as security and a condition that must be fulfilled before the prosecution of the Appeal brought before TAT.

“In certain defined circumstances to which the Multichoice appeal fits, Paragraph 15(7) of the Fifth Schedule to the Federal Inland Revenue Service (Establishment) Act 2007 (FIRS Act) requires persons or companies seeking to contest a tax assessment to pay all or a stipulated percentage of the tax assessed before they can be allowed to argue their appeal contesting the assessment at TAT.”

Multichoice, according to the FIRS spokesman, filed the case at the Lagos TAT following its dispute over the agency’s issuance of Notices of Assessment and Demand Note in the sum of N1,822,923,909,313.94 on April 7.

He said the amount was what the FIRS calculated as due in taxation to the government of Multichoice after an investigation over several months to determine the extent to which the company has been evading taxes in Nigeria.

“At the Tuesday’s hearing of the matter in Appeal No: TAT/LZ/CIT/062/2021 19/08/2021 (Multichoice Nigeria Limited v. Federal Inland Revenue Service), Multichoice Nigeria Limited amended its Notice of Appeal and thereafter sought through its counsel,  Bidemi Olumide of AO2 Law Firm for an adjournment of the proceedings to enable it to respond to the FIRS’ formal application for accelerated hearing of the appeal and prayer before the TAT, directing Multichoice to produce before the Tribunal the integrated Annual report and Management Account Statements of Multichoice Group Ltd for Tax Years 2012 to 2020., among other prayers,” Ahmad said.

He added that in response, the FIRS counsel asked TAT to issue an order directing Multichoice to make the statutory deposit of 50% of the disputed sum.

After hearing arguments from both sides, TAT upheld the FIRS submission and directed Multichoice to deposit with the FIRS 50 per cent of the assessment under the appeal.

The company was also asked to pay 10 per cent % of the deposit as a condition precedent for further hearing of the appeal.

Thereafter, TAT adjourned the appeal to September 23 for report of compliance with its order and continuation of the hearing, subject to compliance with the Tribunal’s order.

Reps Committee Asks FIRS To Produce Receipts Of Tax Payments By MTN

Alleged 10bn Sanction: MTN, FG Settle Out Of Court

 

The House of Representatives Committee on Finance has asked the Federal Inland Revenue Service (FIRS) to submit receipts of the tax payments made by MTN to the agency for 2007 and between 2010 and 2017.

The request comes as the committee observed during its interaction with the agency on Wednesday that MTN is indebted to the tune of ₦451 billion.

The FIRS chairman, Mr Muhammed Nami, however, told the committee that MTN is already paying the taxes owed government in instalments.

Nami further disclosed that the sum of ₦10.104 trillion revenue is expected to be realized in the 2022 fiscal year, with the formal capturing of Facebook, Twitter and other social media platforms into the country’s tax net.

Nami, who was speaking during the interactive session on the 2022-2024 Medium Term Expenditure Framework (MTEF) and Fiscal Strategy Paper (FSP), also unveiled plans for the introduction of Road Tax.

“On the issue of a digital economy, the FIRS has a department called International Tax Department which is handling such cases,” he said.

“Twitter and others are already registering with us. That is why in our revenue projections, we are raising it from N5 trillion in 2021 to N10 trillion in 2022. We expect the impact of those registrations to take effect.”