Nigeria’s Federal Inland Revenue Service (FIRS) has said it will begin the process of enforcing its tax payments in a bid to recover unremitted tax deductions by state and local governments.
FIRS said it will also call out the tax defaulters and shame them publicly to push them to do the needful.
Its Executive Chairman, Muhammad Nami stated in a statement on Wednesday that most state and local governments have failed to remit their tax deductions – Withholding Tax (WHT) and Value Added Tax (VAT) made from payments to service providers and contractors.
In the statement, the FIRS said;
“The notice, highlighting relevant portions of the Companies Income Tax Act (CITA) and the Value Added Tax Act (VATA), 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.
“The notice partly reads, “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.
“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.’’
It further stated that most States and Local Governments have failed to comply with these provisions of the law, despite appeals from the FIRS.
It states, “However, it is regrettable to note that most of the States and Local Governments have failed in their responsibilities of remitting WHT and VAT deducted from payments made to contractors and service providers as required by law.
“The implication is the huge tax debts owed by the States and Local Governments.
“All entreaties by the Service to ensure the remittance of the established unremitted tax deductions by the defaulting States and Local Governments have been unsuccessful as a result of lack of cooperation in adopting the e-payment platforms provided by the FIRS for a seamless deduction and remittance of these taxes.”
The FIRS also added that it may seek legal moves if the states and local governments do not remit their tax deductions in 30 days.