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FIRS Failed To Collect N41 Billion Taxes From Firms – Audit Report

FIRS Failed To Collect N41 Billion Taxes From Firms – Audit Report
The Federal Inland Revenue Service failed to collect taxes worth about N41 billion in Lagos, a government audit report has said.
This is even as it has not been able to meet up with its target over the past four consecutive years, the report added.

The taxes, which are yet to be collected from companies, government agencies, and local government councils, are valued at N40.8 billion.
In the report for the year ended December 2017, the Auditor-General of the Federation (AuGF), Anthony Ayine, said the observation was made during the review of records filed by Companies at Federal Inland Revenue Service Micro and Small Tax Offices (MSTO), Medium Tax Offices (MTO), Large Tax Offices (LTO) and Government Business Tax Offices (GBTO) within the South–west Zone comprising of Lagos, Ogun, Osun, and Oyo states.

He said the uncollected taxes which range from Company Income Tax, Value Added Tax, withholding tax, education tax, to Capital Gains Tax may deny the federal government its legitimate revenue.
“This may negatively affect the implementation of their programs and projects for the benefits of the citizens,” he said.
Breakdown

According to the report, 545 companies had not remitted their Company Income Tax (CIT) to the FIRS valued at a total of N26 billion.
It also said Companies, Federal and State MDAs, Local Government Councils and State Government within the South–west Zone were yet to remit about N8 billion being their Value Added Tax.

Withholding tax from companies, government agencies and local government councils valued at about N5 billion were also yet to be remitted to the FIRS.

About 318 companies were said not to have remitted their Education tax which is 2 per cent on profits of Companies valued at N697 million.
The report also revealed that two companies are yet to remit N99 million, being their Capital Gain Tax of 10 per cent from the disposal of these companies’ assets.

All these unreconciled taxes were said to have been communicated to the FIRS chairman, the report noted.

“This issue was communicated to the Chairman, Federal Inland Revenue Service in my letter reference No. OAuGF/RESAD/FIRS/2017/VOL.II/5 of 1st August 2018 and no response has been received as at the time of forwarding this report.”
The report also said it observed that out of 28,237 duly registered Companies, 11,221 failed to submit their annual returns to various tax offices.

This, it said, is contrary to the provision of Company Income Tax Act which requires a company to render an account of its operations within six months of its accounting year-end.
This number of companies who failed to render its returns represents 39 per cent of duly registered companies with the FIRS.
Leakages

Since 2015, the FIRS under its former chairman, Tunde Fowler, has not been able to meet collection targets, a different trend from the preceding years.

In 2015, FIRS set N4.7 trillion target but was only able to make N3.7 trillion in the actual collection.
In 2016, 2017 and 2018, the target collections were N4.2 trillion, N4.8 trillion and N6.7 trillion but the actual collections were N3.3 trillion, N4 trillion and N5.3 trillion, respectively.

PREMIUM TIMES recently reported how President Muhammadu Buhari queried Mr Fowler, over worsening tax collection since 2015, a prelude to him relieving him of his job weeks later.

In his response to the presidency, Mr Fowler had said FIRS under him performed better regarding specific non-oil tax types, such as VAT and CIT.
He explained that the general lower collection since 2015 is as a result of the falling prices in the oil market.
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Meanwhile, check out viral photos of Nigerian superstar, Wizkid serving guests food at an event.
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