The Senate has ordered the management of the Federal Inland Revenue Service ( FIRS) to go after companies that failed to pay their due taxes in 2015 as shown in the report of the Auditor General of the federation.
In the report it was said that FIRS failed to recover up to N17. 69 billion from different companies that have refused to pay their taxes to the coffers of the government.
The Senate disagreed with FIRS which said it can’t trace N17, 690, 341, 565.00 billion tax evasion by some companies.
According to the Senate, the 2015 Audit report showed that the FIRS claimed it can’t trace the addresses of companies that evaded taxes up to the tune of N17.6 billion.
This as the FIRS said it has fled an appeal against a recent judgment of the Federal High Court in Port Harcourt, Rivers State on the issue of Value Added Tax (VAT) collection.
The FIRS disclosed this in a statement yesterday, by its director, communications and liaison department, Abdullahi Ismaila Ahmad.
The statement reads as follows: “This is to inform the general public that the Federal Inland Revenue Service has lodged an appeal against the judgment of the Federal High Court Port Harcourt Judicial Division delivered by Honourable Justice Stephen Pam, in SUIT NO. FHC/PH/CS/149/2020-ATTORNEY GENERAL OF RIVERS STATE v. FEDERAL INLAND REVENUE SERVICE & ANOTHER. We have also sought an injunction pending appeal and a Stay of Execution of the said judgment.
“As the decision is being appealed and in view of the pending applications for injunction and stay of execution which the FIRS has filed in court against the judgement, members of the public are advised to continue complying with the Value Added Tax obligations until the matter is resolved by the appellate courts in order to avoid accruing the consequent penalties and interest for non-compliance.”
Speaking on the unaccounted N17 billion, the Senate ordered the executive chairman of the FIRS, Muhammad Mamman Nami, to go after the defaulting agencies, recover the money and remit it to Consolidated Revenue Fund (CRF) within 90 days.
It also directed FIRS to sanction its officers involved in alleged overlapping contracts and splitting between 2014 and 2015 and remit N32, 449, 743.61million into government coffers within 90 days with evidence of compliance submitted to the Auditor-General and the Senate Public Accounts Committee.
These were fallouts of the queries issued against FIRS and 104 other public agencies by the Office of Auditor-General of the Federation in the 2015 Audit report , sustained and adopted by the Senate .
The Auditor-General in the query on the N17.6 billion unrecovered taxes by FIRS said: “The Federal Inland Revenue Service failed to recover the total sum of N17,690,341,565.00billion from different companies in the year under review.
“The unrecovered taxes are made up of Value Added Tax( VAT), Company Income Tax( CIT), Withholding Tax ( WHT), Education Tax ( EDT) and NITDEF.
“Though the FIRS in its response to the query said it had recovered N2,879,152, 077.76billion but actual receipted recoveries made by FIRS was N273, 038,474.74million , leaving a balance of N17,417,303,090.90billion to be recovered.
“Several companies were also discovered to have defaulted in filling their Annual Returns many of which FIRS said could not be located due to change of addresses.”
The Senate in adopting the report, directed the Chairman of FIRS to recover the money and pay to the Consolidated Revenue Fund, just as it orders for blacklisting of all companies that failed to file their annual returns.
“Evidence of compliance should be forwarded to the Public Accounts Committee,” the Senate stressed.
The upper legislative chamber was tougher in its resolutions on alleged contract overlapping and splitting by some officers of the revenue generating agency by calling for their identification and sanctioning.
The query reads: ” A contract for the sum of N32, 667,600.00million awarded by FIRS , was split and distributed to four companies , whose submissions were earlier rejected , mainly to accommodate the approval ceiling of the chairman , contrary to Financial Regulations 2921.
“The Audit also revealed that a total of N32, 449,743,61million contracts under recurrent expenditure were awarded by the agency in the 2014 financial year and paid for in January 2015, contrary to financial regulation 414(b)”.
Angered by the infraction, the Senate in its adoption of the report, directed FIRS to pay the money back into government coffers and submit evidence of compliance to the office of Auditor General of the Federation and its Committee on Public Accounts.
FIRS going by the Senate’s resolutions on the N17.6 billion unrecovered taxes and N32 million Contracts splitting and overlapping; has about 60 days left, to make the required recoveries and remittances into the Consolidated Revenue Fund (CRF).