Taxing authority

The National Tax Policy enumerated the roles of taxing authorities.

With respect to the Legislature, tax authorities are required to provide assistance and necessary insight in respect of new tax legislation or the review of existing legislation being considered by the Legislature. Tax authorities shall publicise proposed changes to tax laws and new legislation to taxpayers. They should provide technical input and know-how to aid the Legislature in the discharge of its functions.

Tax authorities are to ensure a cordial relationship and provide necessary information to the Legislature in the discharge of its oversight functions on tax authorities.

Tax authorities should also partner with the Judiciary in relation to training and provision of technical assistance to the Judiciary on tax matters.

Tax authorities are expected to maintain a cordial relationship with all other stakeholders in the tax system and be responsible for the provision of timely and up to date information on developments in the tax system. They shall also, along with the Ministry of Finance and other relevant government organs, provide information to tax payers on the allocation, disbursement, expenditure and utilisation of tax revenue.

It shall be the responsibility of tax authorities to carry out proper tax payer education and public enlightenment along with other government agencies such as the Ministry of Education and Information. They shall also provide guidance to the public on all aspects of tax compliance and other issues relating to the tax system in the form of information circulars, bulletins, handbills, media adverts or newsletter.

In creating a sustainable tax culture in Nigeria, tax authorities shall partner with educational institutions and the Ministry of Education to create a workable framework for the introduction of taxation in the curricula of all levels of educational institutions in Nigeria.

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Generally, tax authorities shall ensure that core tax functions namely assessment and collection of taxes are only carried out by career tax administrators, who are Public Servants, and not by ad-hoc consultants or agents. Thus, only self assessments or assessments duly issued by tax officials shall be recognized by tax authorities in Nigeria.

In addition, the tax authorities should create a conducive tax atmosphere and environment which will engender tax payer confidence at all levels of tax administration; tax payers, shall be provided adequate time and space to review, challenge and appeal every tax assessment or demand made by the tax authorities and every claim, objection, appeal, representation or the like made by any taxpayer must be sufficiently considered.

Where the tax authorities diligently carry out their functions as set out above, it will ensure taxpayer confidence in the tax administration and create a workable and sustainable tax system to benefit of all stakeholders. (National Tax Policy Document)

Some of the Tax Authorities are semi-autonomous revenue authorities (ARAs), organisationally distinct from Ministries of Finance, with some real operational autonomy, and with staff paid at rates substantially higher than those in comparable public sector jobs.

Quite a number of countries have establishedsemi-autonomous revenue authorities, moving tax collection out of theMinistry of finance into a separate entity. In Nigeria, the FIRS, Edo State Internal Revenue Service, Lagos State Internal Revenue Service ,Taraba State Internal Revenue Service and a few others are fully autonomous in their operations. Some others are in different stages of getting the status.

Relevant tax authority

A related term most commonly used in Nigeria is Relevant Tax Authority (RTA)

The relevant tax authority in relation to the following class of tax payers is defined in Section 108 (a) to (d) of PITA to be:

(a) Individual

In the case of an individual, the relevant tax authority for a year of assessment, is the tax authority of the territory or State in which the individual is deemed to be resident in that year.

(b) Executor

The relevant tax authority in relation to an executor, ‘‘is the tax authority of the territory in which the deceased individual was last deemed to be resident or would have been deemed to be resident if the provisions of this Act had been in force prior to the date of his death.’’

(c)Trustee

For a trustee of a trust or settlement, the relevant tax authority is:

(i) where all the income of the settlement or trust for a year of assessment arises in one territory, the tax authority of that territory; or

(ii) where the income of the settlement or trust for a year of assessment arises in more than one territory, or in any other case (where the relevant tax authority cannot be determined under any of the foregoing provisions), the Federal Board of Inland Revenue.

(d) Partnership

For a partnership, the relevant tax authority is the territory in which the principal office or place of business of the partnership in Nigeria is situated on the first day of that year, or is first established during that year.

(e)Village or Community

A village or other indigenous community, the tax authority of the territory in which that community is to be found.

(f)Defined in Regulation 35 (f) of the Self-Assessment Regulation 2011 as ‘the Federal Inland Revenue Service or the State Internal Revenue Service as specified in the provisions of the relevant tax laws.’’

Teju Somorin