Roads are essential facilities that are all-inclusive in their usage, this is the premise of the latest Federal Inland Revenue Service, FIRS proposal to grow the nation’s tax revenue base by capturing adequately the informal sector. In specifics, the FIRS is proposing the introduction of the Road Infrastructure Tax in Nigeria.

By implication, this will mean that every motorist on the road irrespective of working in the informal or formal sector will remit this proposed tax to the federal government for plying the roads to boost road infrastructure in the country and effectively expand the tax net in the face of depleting oil revenue.

This intended move according to the FIRS remains the only way to ensure the informal sector contributes to building a modern society as recently disclosed by Muhammad Nami, the FIRS boss when he received a delegation from the Nigeria Union of Journalists (NUJ) in Abuja.

The proposed Road Infrastructure Tax will be administered by FIRS

Discussing its modus operandi, the FIRS chairman made it known that this proposal is in tune with global best practices and without any ambiguity that the tax if enacted will be solely administered by the federal agency with powers from the Exclusive Legislative List.

Taxmobile.Online deduced that the proposed move is coming on the heels of a Nigerian economy that is now more dependent on non-oil revenue for the government to effectively discharge its statutory responsibility of paying salaries and providing social amenities to the citizenry.

In his words on the proposed move,

 “This is the only way to make the informal sector contribute to building a modern society is by making them pay when they use the roads.”

“That is why we are proposing that government should consider introducing Road Infrastructure Tax in Nigeria.“

“in many jurisdictions, road users pay for the use of road infrastructure as such it shouldn’t be seen as an additional burden on our citizens because it has the potential of making life better for all of us.”

 “Without the tax that you pay governments at all levels would not be able to fulfill their mandate to the electorates. Tax money also helps to ensure the roads you travel are safe and always in good condition,” he said.

On Tax Evasion Post-Pandora Papers

Highlighting some of the strides by FIRS to curb especially the trend of evasion, the FIRS reiterates the need to continue the agenda to drive the use of technologies to maximize tax collection.

What the FIRS’ boss is saying,

“Adopting technology in tax administration is crucial in improving domestic revenue mobilization given dwindling oil prices to avoid falling into a debt crisis. It is against this backdrop that the TaxPro-Max became the channel for filing Naira-denominated tax returns effectively from 7th June 2021.

“The TaxPro-Max enables seamless registration, filing of returns, payment of taxes, and automatic credit of withholding tax as well as other credits to the Taxpayer’s accounts among other features. The technology also provides a single-view to Taxpayers for all transactions with the Service,” Mr. Nami explained.

 “While the TaxProMax will serve as the flagship tool for mining data, it will be complemented by other tools that the Intelligence, Strategic Data Mining, and Analysis Department department may deploy, with the data engineers in the Department carrying out necessary distillations.

“Management also established the Tax Incentive Management Department to manage, implement and report on tax incentives as provided by relevant extant laws and regulations. The TIMD is specifically in charge of the tax affairs of companies/enterprises enjoying tax exemptions and holidays. Companies enjoying Pioneer incentives, Non-Governmental Organizations (NGOs), Cooperative Societies, companies in Export Processing Zones (EPZ), Free Trade Zones (FTZ), Oil and Gas Export Processing Zones (OGEFZ), those engaged in Downstream Gas Utilization and all others enjoying tax holidays are being managed by the TIMD to forestall revenue leakages, such that these companies/enterprises do not use their status as a cover to earn taxable income and refuse to pay tax on such income,”

 “It will interest you to know that the Service collected a total of N4.2Trillion between January to September 2021. This feat was achieved as a result of the efficiency and effectiveness of the TaxProMax Solution and intelligence/data we gathered, mined, and analysed in the period under review.

“The Service successfully facilitated both the mock and external audits for the ISO 27001:2013 certification of the Exchange of Information (EOI) centre, to meet international information security management standards,”.

Pointers to FIRS’ vigorous revenue generation approach

  • The FIRS in the quest for more revenue had between January and September 2021 collected the sum of ₦4.2 Trillion.
  • With the year remaining 2 months, the FIRS as of mid-year had already reached 114.66 percent of the VAT collection projected for 2021.
  • The federal agency in meeting up with international information security management standards had also facilitated both the mock and external audits for the ISO 27001:2013 certification of the Exchange of Information (EOI) centre.
  • To maximize its gains, the tax agency officially launched two critical units; the Intelligence, Strategic Data Mining & Analysis Department (ISDMA) and the Tax Incentive Management Department (TIMD)
  • Amid VAT controversies, FIRS had created 10 Value Added Tax (VAT) Regional Coordination Offices across the country to drive the collection of VAT.
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