Buhari orders FIRS to monitor tax payments by foreign companies

…Says Nigerians must be alive to their tax obligations

By Egena Sunday Ode

President Muhammadu Buhari Thursday in Abuja ordered the Federal Inland Revenue Services (FIRS) and related government agencies to plug all revenue leakages by ensuring strict compliance of tax payments by foreign companies operating in Nigeria.
The President also urged FIRS and other revenue agencies to deploy more digital platforms and seamless connections for that purpose.
Recall that the FIRS had last week said Nigeria lost about N5.4 trillion between 2007 and 2017 through tax evasion by multinational companies in Nigeria.
Executive Chairman, Federal Inland Revenue Service (FIRS), Mr. Muhammad Nami had noted that between 2007 and 2017, Nigeria was reported to have lost over US$178 billion or about N5.4 trillion at today’s rate, through tax evasion by multinationals doing business in the country.
Speaking, virtually, at the First National Tax Dialogue held at the Conference Hall of the State House, the President also ordered all government agencies to automate operations and ensure more synergy in advancing the interest of the nation in revenue generation.
“It is not enough that our citizens and local businesses pay their fair share of taxes. Equally, foreign businesses must also not be allowed to continue to exploit our markets and economy without paying appropriate taxes. Accordingly, the FIRS has my mandate to speedily put all measures in place to fully implement programmes to stamp out Base Erosion and Profit Shifting in all their ramifications and generally automate its tax processes.
“In line with this, I have directed all government agencies and business enterprises to grant FIRS access to their systems for seamless connection. FIRS must ensure that its deployment of technology for automation is done in line with international best practices. In particular, FIRS can borrow a leaf from other countries which have successfully automated their tax processes.’’
The President said Nigeria will continue to work with the Inclusive Framework (on equal footing) to develop internationally acceptable rules for taxation of the digital economy, while hoping that “the Inclusive Framework would have evolved into an acceptable multilateral solution that will comprehensively address the tax challenges of the digitalised economy by the middle of 2021.’’
According to a statement by the Special Adviser to the President on Media and Publicity, Femi Adesina, President Buhari assured citizens that the government will continue to pursue its mandate of improving lives through investments in infrastructural 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. The government has made relevant statutory amendment to tax laws in the Finance Act 2020.’’
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.’’

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