In a renewed move to aggressively recover tax debt after being pressures by Aso Rock through a recent query, the Federal Inland Revenue Service (FIRS) has issued demand notice to companies whose accounts are under lien.
This development comes barely 24 hours after its executive chairman was queried by Abba Kyari, the Chief of Staff to President Muhammadu Buhari.
In an August 8, 2019 query to Babatunde Fowler, the chief executive of Federal Inland Revenue Service (FIRS), President Buhari expects him to response today Monday, August 19 over a cumulative N3.9trillion unmet tax revenue target for a 4-year period.
The Kyari signed letter queried the FIRS chairman over the Agency’s inability to meet target revenue from 2015 to 2018.
The Federal Inland Revenue Service had written to banks to lien the accounts of business entities with annual banking turnover of N100million and above and those that have been collecting Value Added Tax (VAT), as well as deducting Withholding Tax (WHT) without remitting same to Federal Government. Such business entity is one of those that must register for tax before March 15, 2019, the FIRS had noted. “If your business entity fails to comply, its bank account is at the risk of being restricted, as it was recently done to business entities in that category before the restriction was suspended to allow for 30-day grace period,” FIRS had noted.
FIRS later directed the banks to lift the lien on tax defaulters’ bank accounts for 30 days. The grace period ended March 15, 2019 after which a lien or restriction will, again, be imposed on accounts for non-compliance.
In a Monday August 19 public notice signed by Fowler, the FIRS said, “This is to notify all companies, which had their bank accounts placed under lien by the Federal Inland Revenue Service pursuant to Section 31 of the Federal Inland Revenue Service Establishment (FIRSE) Act, but are yet to regularize their tax status with the FIRS, that if they fail, refuse or neglect to pay the tax due within 30 days of this Notice, the FIRS shall in accordance with Section 49 (2) (a-d) of the FIRSE Act proceed and enforce the payment of the said tax against all the Directors, Managers, Secretaries and every other person concerned in the management of the companies and recover the said tax from such persons without further notice.”
“For the avoidance of doubt, the above Section authorises the FIRS to proceed against and punish every officer, manager, director, secretary or any person concerned with the management of the company in like manner as if he/she had committed the offense,” the FIRS further stated.
FIRS revenue collection statistics show that in 2015 it failed to meet set target of N4.7 trillion by N800million as only N3.7 trillion was the actual collection.
In 2016 the target collections was N4.2 trillion but actual was N3.3trillion, representing a shortfall of N900million. In 2017, FIRS targeted N4.8trillion but the actual collection was N4trillion, which represented an unmet target of N800million.
Also, in 2018, despite a target of N6.7trillion set, only N5.3trillion was actual collection representing a shortfall of N1.4trillion.
