FIRS To Enforce Recovery Of Unremitted Tax From States, LGs Through FAAC Deductions

In Breaking News, Business & Economy, CrossRiverWatch TV, Podcast

By Harrison Edeh, The ICIR

Listen To The Report

The Federal Inland Revenue Service (FIRS) said it would commence the process of enforcement and recovery of unremitted tax deductions owed by some States and Local Governments in Nigeria through their respective federation accounts.

In a public notice the service issued today, its Executive Chairman, Muhammad Nami, noted that most states and local governments had failed to remit to the Service the withholding tax (WHT) and value-added tax (VAT) deductions from payments made to contractors and service providers by them, as required by law.

The notice further highlighted relevant portions of the Companies Income Tax Act (CITA) and the Value Added Tax Act (VATA), which stated that ministries, departments, and agencies of government, as well as parastatals and other establishments, were mandated by law to deduct certain taxes while making payments to third parties, and remit those deductions to the FIRS.

Citing relevant sections of the law, the notice read, “The provisions of Sections 78(3), 79(3), 81 of the Companies Income Tax Act (CITA), and Sections 9(I), 13(1) of the Value Added Tax Act (VATA), mandate ministries, departments and agencies of government (MDAs), parastatals and other establishments to deduct WHT and VAT while making payments to third parties and remit same to the Service.

Nami said, “By the provisions of the relevant laws, States and Local Governments are statutorily mandated, as agents of collection, to deduct at source and remit to the Service, all taxes deducted, within twenty-one days.”

He said most States and Local Governments had, however, failed to comply with these provisions of the law, despite appeals from the FIRS, adding that the result was the huge tax debts they were owing to the FIRS.

He disclosed that all entreaties by the Service to ensure the remittance of the established unremitted tax deductions by the defaulting States and Local Governments had been unsuccessful because of the MDA’s non-cooperation in adopting the e-payment platforms the FIRS had provided for a seamless deduction and remittance of the taxes.

Nami warned that the FIRS would consequently advise the Federal Government and the Minister of Finance to henceforth decline approval of any request for the issuance of State bonds or other securities in the capital market.

The Federal Government, he added, would also be directed to decline requests by any of the state and local governments with outstanding unremitted tax deductions for external borrowing, and approval for domestic loans from commercial banks or other financial institutions.

The tax authority stated that it would also publicly name and shame the defaulting state and local governments while publishing the amounts owed in unremitted tax deductions.

It further stated that it would invoke the provisions of Section 24 of its Establishment Act, which empowers the Accountant-General of the Federation to deduct at source, from the monthly FAAC allocations, unremitted taxes due from any government agency, and to, thereafter, transfer such deductions to the Federation Account and notify the Service.

The FIRS called on all defaulting states and local governments to promptly remit all unremitted tax deductions within 30 days of the publication of the Notice to stop it from taking these punitive actions.

Watch

You may also read!

NUJ Rejects Governor Otu’s Imposed General Manager On State-owned Chronicle Newspaper, As Controversies Trails

By Patrick Obia The Nigerian Union of Journalists (NUJ), Cross River State Council has refused to accept a non-media

Read More...

All State And Local Government Workers, Pensioners Should Be Paid Immediately – Otu Directs

By CrossRiverWatch Admin The Governor of Cross River State, Senator Bassey Otu has directed the immediate payment of all

Read More...

It Takes More Than Courage To Challenge Institutions… BY AGBA JALINGO

Courage may be simply explained as the ability to go ahead and do something that frightens you or the

Read More...

Leave a reply:

Your email address will not be published.

Mobile Sliding Menu

Share this now