The Federal Inland Revenue Service (FIRS) has disclosed that it is proposing the introduction of Road Infrastructure Tax in Nigeria, to make the informal sector contribute to building a modern society.
Muhammad Mamman Nami, Executive Chairman of FIRS, made this known on Thursday, October 21, while receiving a delegation of the Nigeria Union of Journalists, NUJ, led by its National President, Chris Isiguzo, in his office, in Abuja.
Nami explained that the proposed Road Infrastructure Tax to be administered by FIRS, will provide the government with adequate funding for road construction, rehabilitation, and maintenance, as well as providing the needed security for roads in the country.
The FIRS Executive Chairman said: “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.“
He noted that “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.”
Nami explained further that Nigeria’s economy presently relies heavily on non-oil revenues to discharge its statutory responsibility of paying salaries and providing social amenities to the citizenry.
“Without the tax that you pay governments at all levels would not be able to fulfil their mandate to the electorates. Tax money also helps to ensure the roads you travel are safe and always in good condition.”
He said despite sharp practices by some companies who were in the habit of evading taxes, by shifting their capital and profits to tax havens, as well as low revenue from Petroleum Profit Tax, due to the shortfall in crude oil production among other factors, the FIRS has been putting forward critical reforms that have been yielding positive impact on the Service’s operations.
“Adopting technology in tax administration is crucial in improving domestic revenue mobilization in view of dwindling oil prices in order to avoid falling into 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.”
Muhammad Nami also noted that the management of the Service had established two critical units, the Intelligence, Strategic Data Mining & Analysis Department (ISDMA) and the Tax Incentive Management Department (TIMD) as part of institutional reforms to generate more revenue and forestall revenue leakages.
According to him, “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.”
Nami added that the service created 10 Value Added Tax, VAT, Regional Coordination Offices across the country to drive collection of VAT.
The FIRS Executive Chairman highlighted that these reforms put in place were already yielding result, including the collection of the sum of N4.2 Trillion between January and September, 2021, the successful facilitation of ISO 27001:2013 Certification of the FIRS’ Exchange of Information Centre, and the achievement of 114.66 percent of the VAT collection target in the first half of the year.
He said: “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 analyzed 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.”
While congratulating Isiguzo for his recent reelection as the National President of NUJ, which was a reflection of his uncommon achievements at the NUJ, he urged NUJ Members to be constructive in their criticisms of the operations of the Service urging that they “should always confirm or verify sources and accuracy of information.”