The new acting chairman of the Federal Inland Revenue Service (FIRS), Mr Babatunde Fowler, has barred tax consultants from assessing and collecting tax revenue on behalf of the federal government.
The FIRS boss, who announced this yesterday in Abuja when he met with members of the Joint Tax Board (JTB), said that, henceforth, consultants will be engaged by the FIRS to gather data only.
Fowler said the FIRS had about “1,000 staff in audit function, so you can imagine 1,000 members of 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 are just to assist our staff to collect data.”
He said the FIRS would do the assessment with the States’ Board of Internal Revenue and issue the demand notices for the taxes 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 five per cent 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 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 elsewhere.”
In order to build on the achievements of his predecessors, Fowler said he would reach out to States’ Board of Internal Revenue for collaboration.