BusinessDay

States owe N41b in unremitted VAT, withholding tax – NEC

The National Economic Council (NEC), Thursday, said States are owing over N41 billion in yet to be remitted deduction of Value Added Tax (VAT) and Withholding tax deductions due to the Federation Accounts

This followed presentations to the Council by the Executive Chairman of the Federal Inland Revenue Services, FIRS, Babatunde Fowler, at the NEC meeting Chaired by Acting President Yemi Osinbajo, at the Presidential Villa, on Thursday

Fowler had reported that the audit of the States Ministries, Departments and Agencies MDAs has commenced with respective Governors and Finance Commissioners duly notified, adding that “the total outstanding debt of States’ MDAs stands at N41,047,661,213.66 for the period 2008 to 2016”

While seeking the cooperation and collaboration of the state governors for the successful and timely conduct of the exercise, Fowler urged governors to direct state MDAs to adopt the use of the payment platform or a comparative alternatives.

The presentation which centered on the contribution of MSMEs to GDP, National Export and to Tax collection for 2015 – 2018, also highlighted the challenges impeding the optimization of the over 37 million Micro Enterprises, Small Enterprises and Medium Enterprises, MSMEs’ contribution to Tax Revenue.

“When adequately harnessed, MSMEs can have much impact on the profile tax revenue for the country – especially considering their direct correlation with personal Income Tax, VAT and Withholding Taxes”

He listed the challenges Impeding Optimization of MSMEs Contribution to Tax Revenue: among others, to include Poor record keeping and information management, Inability to distinguish personal capital from business money.

Others include Low awareness of the Nigerian Tax Laws and Little or no business research leading to close of business, even as the FIRS also listed Strategies and action plans to improve the contributions of MSMEs to include prompt deployment of adequate man-power to promptly attend to all tax related challenges by MSMEs.

He also urged others organs of Government saddled with disbursement and utilization of tax revenue to endeavour to be transparent and accountability in order to motivate Voluntary Tax Compliance by the MSMEs.

“Government at all levels should endeavour to provide infrastructural facilities and enabling business environment to allow MSMEs Business to thrive”

“Fowler notified the Governors and Finance Commissioners of the ongoing audit exercise and requests the cooperation and collaboration of the States for the success and timely conduct  and completion of the exercise.
“The report informed Council that remittances from States (January to July 2018) stands at N40,299,839,092.79.
“The report noted that the Honourable Minister of Finance has directed the Federal MDAs and States to verify the authenticity of Tax Clearance Certificates (TCC) online as presented by contractors before awarding contracts.

“Federal and States MDAs are enjoined to send copies of Manual TCCs issues before August 22, 207 to FIRS for verification before awarding and making payments.
Action Points

“All States MDAs are encouraged to adopt the use of the Payment platform or a comparative alternative – Governors to ensure compliance. States Governors should direct their MDAs to cooperate with FIRS Auditors for timely completion of the States Audit exercise.
Minister of Finance, Kemi Adeosun reported to the Council that the balances in the under listed Accounts as at August 14, 2018 shows that Excess Crude Account (ECA) balance is $ 2, 250, 434, 918.00, Stabilization Fund Account stands at N21, 591, 091, 564.37, while the Natural Resources Development Fund, stands at N 143, 479, 688, 711. 25

Also briefing State House correspondents, the Deputy Governor of Benue, Benson Abounu, commended the efforts of security operatives at mitigating the spate of insecurity in the state.

 

He especially thanked the Operation Well-stroke mounted by the Nigerian Army for their decisive operation against criminals in the state.

 

“The security situation in Benue has improved as compared to the previous Military Exercise operation, now many Internally Displaced Persons have returned home, the State is relatively calmed”, he said.
Abounu also called on the Federal Government not to withdraw Operation Well-Stroke from the State soon.

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