Adedeji Demands Enhanced Compliance To Expand Tax Base

Chairman of the Federal Inland Revenue Service Zacch Adedeji has appealed for enhanced tax compliance among tax-collecting institutions to expand the tax base and make up for the gap that was created by the recent reduction in withholding tax rate aimed at easing the burden on businesses and citizens.

The FIRS chairman appealed yesterday at a workshop on enhancing tax compliance and revenue generation held for accountant-generals of states, directors of finance of FCTA, and FG-owned enterprises to ensure effective tax remittance and reporting.

He said the government has made efforts to simplify the tax remittance process, through a centralised payment system where accountant-generals handle payments on behalf of government agencies, a move he said has been instrumental in ensuring swift remittance of taxes such as VAT, withholding tax, and stamp duties.

“We have also reduced the WHT rates to focus on taxing profits rather than revenue, a move that aims to ease the burden on businesses and citizens. While this may reduce the immediate tax collection, we believe that with enhanced compliance and collaboration, we can expand the tax base and make up the difference,” Adedeji stated at the event in Abuja.

The FIRS chairman emphasised that the organisation has been achieved through the integration of technology, improved processes, and capacity building for our people. “These advancements have not only enhanced tax compliance but have also positioned us to meet our ambitious target of an 18 per cent tax-to-GDP ratio by 2026.”

Adedeji told the participants that they needed to look inward and “increase our internally generated revenue” to deal with the multifaceted economic challenges the nation is facing.

However, he said this does not necessarily mean increasing tax rates. “Instead, we must focus on blocking leakages and ensuring full compliance with the existing tax laws, a task that I believe we can achieve together.

The chairman told the accountant generals and directors of government that they are responsible for ensuring that VAT is charged and remitted, that stamp duties are paid on contracts, and that withholding tax (WHT) elements in contracts are properly withheld and remitted. “These are not just tasks assigned to you by law, but responsibilities that are central to the success of our collective mandate. We trust that, whenever we call upon you, we can count on your continued support and cooperation.”

Accountant-general of the federation, Oluwatosin Madein, commended the accountants general of states that made it to the workshop, noting that the workshop was timely because stakeholders must be empowered.

Madein, who was represented by Ademola Makinde, urged the participants to help the government in its quest to generate enough revenue to provide services for the people.