The Federal Inland Revenue Service (FIRS) has proposed the introduction of road infrastructure tax in Nigeria, to enable the informal sector contribute to building a modern society.
Muhammad Mamman Nami, executive chairman of FIRS disclosed this in his office in Abuja on Thursday while receiving a delegation of the Nigeria Union of Journalists (NUJ), led by Chris Isiguzo, its national president.
Nami said the proposed road infrastructure tax to be administered by FIRS, will provide the government with adequate funding for road construction, rehabilitation, and maintenance, as well as provide the needed security for roads in the country.
“The only way to make the informal sector contribute to building a modern society is by making them pay when they use the roads. That is why we are proposing that government should consider introducing Road Infrastructure Tax in Nigeria,” he said.
According to him, road users in many jurisdictions, pay for the use of roads in such a way that it will not be an additional burden on the citizen.
Nami stated that Nigeria’s economy presently relies heavily on non-oil revenues to discharge its statutory responsibility of paying salaries and providing social amenities to the citizenry.
“Without taxpayers’ money, governments at all levels would not be able to fulfil their mandates to the electorates. Tax money also helps to ensure that roads we travel are safe and always in good condition,” he said.
Nami also stated that the FIRS has been putting forward critical reforms that have been yielding positive impact on the Service’s operations, despite sharp practices by some companies that evade taxes by way of shifting their capital and profits to tax havens, and low revenue from Petroleum Profit Tax caused by shortfall in crude oil production.
“Adopting technology in tax administration is crucial in improving domestic revenue mobilisation in view of dwindling oil prices in order to avoid falling into debt crisis. It is against this backdrop that the TaxPro-Max became the channel for filing Naira-denominated tax returns effectively from 7th June, 2021,” he said.
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He explained that the TaxPro-Max enables seamless registration, filing of returns, payment of taxes and automatic credit of withholding tax as well as other credits to the taxpayer’s accounts among other features.
To him, technology also provides a single-view to taxpayers for all transactions with the Service.
Nami also said that FIRS had established two critical units, the Intelligence, Strategic Data Mining & Analysis Department (ISDMA) and the Tax Incentive Management Department (TIMD) as part of institutional reforms to generate more revenue and forestall revenue leakages.
“While the TaxProMax will serve as the flagship tool for mining data, it will be complemented by other tools that the Intelligence, Strategic Data Mining and Analysis Department may deploy, with the data engineers carrying out necessary distillations,” he said.
On other reforms carried out by FIRS, he said, it also established the Tax Incentive Management Department to manage, implement and report on tax incentives as provided by relevant extant laws and regulations.
“The TIMD is specifically in charge of the tax affairs of companies enjoying tax exemptions and holidays to forestall revenue leakages. TIMD does this by ensuring that these companies do not use their status as a cover to earn taxable income and refuse to pay tax on such income,” he said.
Nami added that the service created 10 Value Added Tax (VAT), regional coordination offices across the country to drive collection of VAT.
He further said that these reforms put in place were already yielding result such that FIRS collected the sum of N4.2 trillion between January and September, 2021, successful facilitated ISO 27001:2013 certification of the FIRS’ Exchange of Information Centre, and achieved 114.66 percent of the VAT collection target in the first half of the year.
Earlier, Isiguzo, NUJ national president, said the visit was part of his resolve to engage critical institutions in charting a way forward for Nigeria’s collective good.
He described FIRS as a vital institution that requires support especially at a time when the country is security-challenged, adversely affected by Covid-19 and faced with forex crisis as well as political intrigues from different parts of the nation.
“With your recent admission that only about 44 million out of a possible 100 million plus that pay tax makes it urgent for a robust integrated media campaign to get more Nigerians into the tax net,” he suggested.
