The Executive Chairman of the Federal Inland Revenue Service (FIRS), Tunde Fowler, has urged the National Assembly to make a law that will send tax evaders to jail.
Mr Fowler said over 40,000 eligible taxpayers who record between N100 million and N1 billion turnover in their accounts are not paying taxes at the moment.
He said this yesterday when he led officials of the FIRS at an appearance before the Senate Committee on Appropriations in Abuja.
“Just a little over 3000 of the taxpayers who have a lien on their accounts have paid N103 billion. In Nigeria, if you have the courage to pass laws that will send tax defaulters to jail, the 40,000 tax defaulters will pay,” he said.
“These are businesses or individuals that have income but had refused to pay taxes. Currently, we have close to 40, 000 of those accounts under lien for which they have not paid any taxes
“And I believe that this is a crime against the society and I think that we are at that point now where we have no choice than to enforce payment.
“I did highlight earlier that 3000 of those accounts paid N102 billion. I think that we have reached that stage where the society, in general, should not condone those among us who have the opportunity and privilege to have a job or to earn profits and also accept them not to pay taxes to contribute to the society” he said.
Enforcement Generated Revenue
Mr. Fowler while explaining the various measures of the service to bring people into the tax net, said it granted tax amnesty in 2016, in which 5000 companies came through and paid N92 billion within 45 days.
He said the Voluntary Assets and Income Declaration Scheme also accrued N90 billion in a year, stressing that N90 billion can make a difference in a developed or a developing country.
Business Incentives
Mr. Fowler said Nigeria is giving and has given incentives to small businesses.
“I will first start with incentives. It was true that the past government, the government before this one, did give a lot of incentives. And if you look at the history of business and incentives, regardless of which country you are in, businesses do not grow because of incentives, they grow because they believe that they can make profits and, of course, they want certainty.
“But in terms of incentives for the small-scale businesses with turnovers of N25 million and below, within the Finance Bill that has also been submitted for approval, there is a recommendation to reduce the Companies Income Tax (CIT) rate from 30 percent to 20 percent,” he said.
He said over the last few years, from 2015, FIRS waived all interests and penalties for small-scale businesses that did not remit taxes or up-to-date with their filings.
He also said the government has decided to assist small-scale businesses.
Mr Fowler said the office of the Vice President indicated through the President that they will try to make sure that there is a policy that 40 percent of local expenditure is given to local businesses, which include the small-scale businesses.
“Paying taxes can save lives”
Mr. Fowler said some years back, he found out that Nigeria has the highest rate of infant mortality and that was due to malaria.
He said his discussion with the hospitals revealed that a child’s life could be saved with N2,500.
“So, even for the small-scale businesses that make profits, even if they go to pay taxes, even if it is the minimal tax, everyone who earns an income should pay tax irrespective of how small it is with the consideration a sum as small of N2, 500 could save a life,” he said.
Need for infrastructure
“In terms of production, Yes. Production activities create employment. Employment creates more tax revenue. For you to be in a state of production, you need infrastructure. So, the question is, what comes first? The chicken or the egg?
“The government needs funds to provide the infrastructure that would be conducive for business.”
Mr. Fowler said once there is a conducive infrastructure to encourage businesses, tax revenues will come in.
Expected target
Mr. Fowler had mentioned that FIRS’ 2019 target is a 32 percent increase over the 2018 target.
He said it is currently ahead of the 2018 target by 13 percent, which translates to N71 billion.
“We believe that the non-oil sector will continue to improve. We are currently at 72 percent in the non-oil sector.
“The bulk of the revenue of the FIRS comes from the middle of the year, from July to December. We are still hopeful that if the non-oil sector continues to improve, we achieve 80 percent of the target. That should be sufficient” he said.
Oil-sector performance not impressive
He said the main challenge the service is faced with is the oil-sector which is performing under 50 percent.
He linked the performance of the sector to the level of production, which he said is low in relation to budget. He said oil price is equally low.
“I think that what we should consider is that when you set a target, it should be challenging. I believe that if we can achieve 80 to 85 percent of that target, it is well met”.
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