It is no news to frequently hear the tax administration as championed by the Federal Inland Revenue Service blow the whistle, especially on foreign and local contractors for not remitting due taxes with proof of tax credit.
However, these contractors are quick to debunk the aforementioned claims of tax evasion as suggested by FIRS, pointing the blames right back at the government’s agency for failing to document appropriately. This has been the case for some time now.
As an antidote to this back and forth, Dr. Kennedy Iwundu who is both the Chairman of FCT Tax Practitioners Association and Vice Chairman Chartered Institute of Taxation of Nigeria, Abuja District has suggested the need for the FIRS to fully adopt the Tax Identification Number, TIN.
The full adoption of TIN has been advised for tracking deductions and remittances by these contractors. This move according to the expert will affect positively the check on the level of tax compliance and remittances in the country.
Buttressing his professional take, Iwundu who also doubles as the Director, Association of Charted Systems Tax Professionals USA, and the managing partner Accounting Tools Consulting Services highlights that contractors over the years find it a herculean task to access tax credits with FIRS due to consistent complaints by the government agency of not possessing evidence of tax credits remitted.
To make TIN adoption more efficient, the expert suggests that the FIRS in complement should adopt award of contract letters, contractor bank statement as a viable alternative to granting a tax credit to taxpayers who have suffered deductions from government agencies and parastatals.
What you should know about TIN
The Taxpayer Identification Number is a number peculiar to a business or individual for the sole purpose of tax payment. TIN in Nigeria took off in February 2008.
Recall that in July 2020, the Corporate Affairs Commission had announced that upon successful registration of companies under Part A of a Limited Liability Company mandated that TIN would be assigned to such company.