Tax consultants have been shut out of assessing and collecting tax revenue on behalf of the federal government.
This clarification was given Monday by the new Acting Chairman of the Federal Inland Revenue Service (FIRS) Mr. Babatunde Fowler in Abuja when he met with members of the Joint Tax Board (JTB).
Fowler admitted that consultants will be engaged by the FIRS to gather data only.
He said the FIRS has “under 1,000 staff in audit function so you can imagine 1,000 staff trying to review or audit the books of 450,000 companies, it just won’t work, to improve the levels of transparency and accountability these consultants will only gather data, the law does not allow them to do assessment or collect revenue on behalf of government they’re just to assist our staff to collect data.”
The FIRS he said; “will do the assessment with the States Board of Internal Revenue and issue the demand notices for the tax due.”
Some state members of the JTB had complained that “many consultants come to make huge claims so that they can get huge commissions, but they don’t have the capacity to actually collect the huge revenue they claim to have collected in some states.”
On recent calls for an upward review of the Value Added Tax (VAT) collected by the federal government, Fowler noted that “it is the responsibility of the federal government and the federal ministry of finance to decide whether that (VAT) will change.”
Fowler agreed that 5 percent VAT charge was low “when you consider other countries who charge VAT both in West Africa and in Europe but those other countries have reached what I will call the maximum level when it comes to paying taxes or public tax. Those countries have 99 percent tax compliance so I think we should first of all get there before we consider increasing VAT, when everyone is paying their taxes then we can look elsewhere.”
In order to build on the achievements of his predecessors Fowler said he would reached out to States Board of Internal Revenue for collaboration stressing that “there are many stones left unturned as far as our current tax administration processes are concerned. For example it is common knowledge that administration of VAT is greatly hindered by many factors, ranging from inadequate coverage of vatable persons to non-remittances of VAT deductions, tax revenue loss in this aspect can only be imagined,” he said.
Speaking to journalists on how the FIRS will operate under his watch, Fowler said his “strategy is going to change a bit, our objective is to have 99.9 percent level of compliance meaning that everyone and corporate entities that are taxable are captured in the tax net and pay the appropriate tax.”
The FIRS he said will “exchange information with states boards of internal revenue so that we have all the information on their own data base, we’ve given them ours already meaning that if there is any company that they don’t have in their data base they can capture such company so immediately we will have a growth in the number of tax payers at both the federal and state levels within one week.”