BusinessDay

FIRS invites foreign tax defaulters to regularise position

The Federal Inland Revenue Service (FIRS) has called on foreign companies in the aviation and maritime industries, who had lifted cargoes out of Nigeria without paying taxes to voluntarily regularise their tax standing.

The executive chairman, Muhammad Nami, made this call on Thursday stated that the maritime and aviation industries have not yielded the expected revenue to the Federation’s purse over the years.

Nami who delivered an address at the Pedabo Thought Leadership Breakfast Session focused on tax issues and the impact on development in the maritime and aviation industry, held in Lagos State, said that a major reason for the poor yield was the failure of foreign companies lifting cargoes to pay tax.

Read also: NEPC sensitises Cross River exporters on $2.5trn AFCFTA market

“The low tax revenue performance of the two industries can be attributed to many factors, chief of which is the failure of foreign companies lifting cargoes (particularly, crude oil) to pay tax. This is contrary to the provisions of the extant tax laws. The revenue leakage from these non-compliant companies is very huge.

“Tax authorities are unable to police these foreign companies because the transportation contracts are executed outside Nigeria and the tax authorities do not have the lifting schedules of the vessels ahead of their arrival in Nigeria.

“Let me use this opportunity to invite all foreign companies that have lifted cargoes (including crude oil) out of Nigeria without paying tax in line with extant law to voluntarily come forward to regularise their tax positions. Those who would wait for FIRS’ audit before doing the right thing may find the taste very unsavoury.” He stated.

Speaking further, Nami said that governments’ existence and socio-economic development across the world today is defined by tax; as taxation has gone beyond a mere tool for raising revenue or a mere civil obligation of citizens.

He further disclosed that the Agency’s plan to launch a tax audit exercise on operators in the maritime and aviation industries adding that “Back-end pre-audit activities, in collaboration with regulatory authorities in the industries, are at advanced stages.

“The whole world is engulfed in a tax war. In days ancient, nations went to war to capture land for its inherent natural resources. Today’s war is about tax. The inability of the Inclusive Framework to reach a consensus on the tax questions around the digitalised economy is a clear testimony that tax is the new “resource” for which people go to war.