Tax consultants have been barred from assessing and collecting tax revenue on behalf of the Federal Government.
This clarification was given yesterday 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,’’ he said.
The FIRS he said will do the assessment with the States Board of Internal Revenues (SBIRs) 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 wether that (VAT) will change.
Fowler agreed that five per cent VAT charge was low when other countries that charge VAT both in West Africa and in Europe but those other countries have reached the maximum level when it comes to paying taxes or public tax. “Those countries have 99 per cent 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 else where,” he said.
In order to build on the achievements of his predecessors, Fowler said he would reach out to SBIRs 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.”
Speaking to reporters on how the FIRS will operate under his watch, Fowler said his strategy is going to change a bit.
He said: “Our objective is to have 99.9 per cent level of compliance meaning that everyone and corporate entities that are taxable are captured in the tax net and pay the appropriate tax.
“ FIRS 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.”
The FIRS Chairman said the agency has identified and located taxpayers through sharing and exchange of information as much as possible, addng that it will conduct joint audit exercises by FIRS and SBIRs; carry out joint tax enlightenment and enforcement exercises.