KPMG, stakeholders seek talks over FIRS’ new tax regime for NCRs

KPMG Nigeria, business advisory services firm, has urged Federal Inland Revenue Service (FIRS) to further engage tax payers across Nigeria in order to clarify grey areas in the regulator’s new directive to non-resident companies (NCRs) operating within the country to file their tax returns with financial statements.

Speaking at the firm’s second Tax Breakfast Meeting held in Lagos, recently, Adewale Ajayi, partner, tax, regulatory and people services, KPMG Nigeria, pointed out that one thing that was clear was the need for the tax regulator to engage more with tax payers in order to address the various issues they had raised at the meeting.

According to Ajayi, some of the areas of the new directive mean the FIRS have to consider having further engagement with stakeholders in order to clear up some of the ambiguities and grey areas of the new guideline. Some of these areas involve how the non-residents companies would compute capital allowances and the timeframe for filing, as the taxpayers have to comply with the new policy.

Ajayi said on the sidelines at the meeting that the event provided an avenue for “stakeholders in the tax space to engage with the FIRS to clarify certain issues, and it is clear that there are a whole lot of issues that the FIRS have to resolve.”

The regulator needs “to go back and look at these issues, and then see how they can address the concerns that the taxpayers have raised,” he said.

Earlier, Ajayi Bamidele, head, enforcement group, FIRS, who gave the presentation on the theme ‘Requirement for Non-Resident Companies to File Tax Returns with Financial Statements,’ said it was obvious that the non-resident companies were concerned about the new policy due to the demands of preparing audited accounts and computing capital allowances.

The nation’s tax laws required that “every company, whether you are resident or non-resident, must file your tax returns once in a year and that should come with self-assessment, Bamidele explained, and the self-assessment itself should come with audited accounts, capital allowances and all other documents that are relevant to that tax return.

He said his takeaway from the meeting was that the FIRS needed to do more by way of sensitisation, as “the takeaway from this engagement is that there is need for more engagement.

“Two, is that we need more clarifications on the part of FIRS to go and do more sensitisation; we need to engage them and make things clearer to them, especially the implementation of that Section 55. That would make compliance easier for them.”

There would be a more aggressive tax regime soon, he said, saying that “definitely, there has to be (a more aggressive tax regime) because in the system, there has been some concessions that ‘the moment they take the deem profit, that is all.’ But there were other activities that were not know to FIRS in the past.

“Then when the issue of transfer pricing came in, they now realised that it goes beyond what they have been going in the past and that there is need for exposure, both locally and at international level.

“That we can exchange information with the other side of the world, and with that exchange of information, whatever is hidden from Nigeria can always be exposed by international bodies. That is why some of them are scared.”

 

OLUSEGUN ABISOYE