The Federal Inland Revenue Service (FIRS), will soon go after the bank accounts of defaulting taxpayers who are raking in billions in the country but are not paying taxes.
In doing that, chairman, FIRS, Tunde Fowler, said the Revenue Service, through all banks in the country, will do substitution on accounts for such identified taxpayers. He said there are Over 6772 of such defaulting billionaire taxpayers been identified by the FIRS, leveraging on banks data.
Fowler who disclosed this at a stakeholders’ meeting in Lagos, noted that most of such taxpayers, who have between N1 and N5 billion in their accounts have no Taxpayer Identification Number (TIN) or have TIN and have not filed any tax returns as taxpayers.
“What we have done is what we call ‘‘substitution’’ which also is in our laws which empowers us to appoint the banks as collection agents for tax. So, all these ones of TIN and no pay and no TIN and no pay, to the total of 6772 will have their accounts frozen or put under substitution pending when they come forward. First, they refused to come forward in 2016, they refused to come forward under VAT and are still operating here. So, we are putting them under notice that it is their civic responsibility to pay tax and to file returns on these accounts.
“We looked all businesses, partnerships, corporate accounts that have a minimum turnover of N1 billion per annum for the past three years. First of all, the law states clearly that before you open a corporate account, part of the opening documentation is the tax I.D. From the 23 banks, we have analysed so far, we have 31,395 records, out of which effectively minus duplications we had 18,602,” Fowler said.
He said the record is broken into three categories: Those that have TIN tax I.D, those that don’t have no TIN and those that have TIN and have not even paid anything. On a minimum, Fowler said every company or business included here over the last three years have had a banking turnover of N3billion and above. Some of them have had banking turnover of over N5billion and have not paid one kobo in taxes. Now the total number of TIN and no pay is 6772.
“So, if someone is good in mathematics and you take the minimum level of N3 billion multiply by 409 and they are operating within our society and economy and do not remit or make any tax payment,” he said.
He noted that FIRS is also paying closer attention to Audit. ‘‘We have started a comprehensive audit exercise that involves both national and regional audits because we got to a position where we found out that most of the major organisations that were allowed to do self-assessment, do not truthfully declare or pay the taxes that were due. To date we have raised assessment of over N805 billion from 1324 National Audits out of which 499 (taxpayers) have N219 billion.
“N219 billion, it can do a lot of things. It can provide certainly a lot more infrastructure, healthcare and educational facilities. These monies that are supposed to go into the Federation Account are shared between federal, local and state governments. So, every state can get an additional 1 billion from such monies, hopefully if you vote right, that governor, that governor would deploy it to the right place.’’
The stakeholders’ meeting that took place at Oriental Hotels in Lagos was attended by representatives of the Nigerian Bar Association, (NBA), Manufacturers Association of Nigeria, (Man am, CBN, Nigerian Employers Consultative Council, (NECA) Labour unions, professional accounting and audit firms, tax consultants amongst others.
He did not spare the FIRS either. “If you look at 2018 revenue to date, between January and August, we have done N3.5 trillion, which is N1 trillion over 2017. But the main point I want to make is that majority of taxpayers that accounted for this revenue have not changed. The laws have not changed. And to a great extent, the consultants to these companies have not changed. If you look at 2017, there is an increase of close to N800 billion over the 2016 collection.
“The increase in 2018 so far showed N1 trillion. If the same consultants advised or reviewed the accounts of the majority of the taxpayers, one would wonder why such large increases occurred. It is either the taxpayers did not disclose fully their financials to the consultants or the consultants involved in tax planning,’’ said Fowler.