Executive Chairman, FIRS, Mr Muhammad Nami, disclosed this on Friday during a public hearing organised by the House of Representatives Committee on Public Accounts investigating revenue leakages arising from tax waivers and incentives to foreign companies granted pioneer status.

According to Mr Nami, the new rule is contained in a recent Practice Direction issued by the Chief Judge of the Federal High Court, Abuja, Hon. Justice John Terhemba Tsoho, under Order 57 rule 3 of the Federal High Court (Civil Procedure) Rules, 2019.

He also confirmed that the Practice Direction took effect from 31 May 2021.

Mr Nami also stated that the Management of FIRS “has initiated a process for a Memorandum of Understanding (MoU) with critical stakeholders as far as information sharing and amendments to the relevant laws are concerned.”

He revealed further: “We have gotten several amendments to our tax laws which require companies operating in the Free Trade Zones to file tax returns on their operations to the FIRS.”

These amendments are aimed at checking the activities of taxpayers currently taking advantage of some gaps in our tax laws and fiscal policy by establishing businesses in the nation’s tax-free zones.

He emphasised that such companies produce goods that are meant for export and then sell the goods to our custom’s zone thereby making it impossible for the companies operating in our custom’s zone to operate competitively with them.

However, as part of efforts to attract investment vis-a-vis raising revenue for the government, Nami also hinted that as a first step, “FIRS has set up a high-power committee which is made up of senior officials of FIRS and the National Investment Promotion Commission(NIPC) to look into issues patterning to tax waivers and granting of pioneer status”.

Nami, who maintained that tax evasion and tax avoidance were global phenomena, also said that such practices were equally fiscal policy issues.

He then urged the National Assembly to, as a second step, amend the relevant tax laws that would make it almost impossible for these companies to exploit loopholes in our tax laws to shift both profits and taxes to their countries of origin.

He pointed out that taxes not paid to Nigeria or waived by the Nigerian government were returned to the treasury of defaulting companies’ home countries operating in Nigeria, hence the need for legislation to address the issue.

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The Head, Communications and Servicom Department, Mr Wahab Gbadamosi, made this known in a statement in Abuja on Tuesday.

Gbadamosi said the Acting Executive Chairman of FIRS, Mr Abiodun Aina, announced this in a notification letter to taxpayers on Tuesday.

He stated that Aina informed defaulters of the plan by the service to begin tax enforcement against them should they continue to fail in fulfilling their tax obligations.

The spokesperson said the acting executive chairman advised such taxpayers to settle their tax liabilities within seven days of the notice to avoid any inconveniences or interruptions in their operations.

He quoted Aina as saying “The FIRS hereby informs all taxpayers, individuals, partnerships, Enterprises, Corporate organisations, Ministries, Departments and Agencies who are in default of payment of taxes arising from self-assessment, tax audit, tax investigation, transfer pricing audit, demand notices and any other liabilities to pay.

“The Service will commence a nationwide tax enforcement exercise from December 18, 2019 with a view to prosecuting defaulters and recovering all outstanding tax liabilities.

“The enforcement is pursuant to the provisions of Sections 8, 26 (2), 33 and 35 of the FIRS establishment Act, 2007.

“The taxes referred to are as follows: Petroleum Profits Tax, Companies Income Tax,  Value Added Tax,  Withholding Tax, Tertiary Education Tax, NITDA Levy, Stamp Duty and Capital Gains Tax,” he explained.

Source:  NAN

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