The Federation of Construction Industry has said that over N36bn Withholding Tax credit belonging to its members is pending with the Federal Inland Revenue Service.
FOCI, which is the umbrella body for all the construction firms in the country, stated that the pending WHT credit notes had constrained its members from applying for tax settlement.
The body appealed to the FIRS to work out modalities that would ensure that the excess WHT, which was deducted from source as a result of contracts executed for agencies of government, was refunded to them.
The President, FOCI, Mr. Nasiru Dantata, made the appeal when he led members of the group on a courtesy visit to the Executive Chairman, FIRS, Mr. Babatunde Fowler.
He explained that the current economic situation was affecting the construction industry, adding that there was a need to get the refund to reduce the level of hardship being faced by the firms.
Dantata drew the attention of the FIRS boss to inconsistency in the WTH rate, adding that it was initially fixed at five per cent, later reviewed down to 3.5 per cent and finally 2.5 per cent.
He said, “An issue that is bothering us is the rate of the Withholding Tax. Sometime ago, the five per cent was reduced to 3.5 per cent.
“Like you know, the industry is suffering from a lot of delayed payment from both the federal and state governments. This is not new and it has nothing to do with this office. As you are aware, the cash position of our companies is greatly affected by the rate of Withholding Tax.”
Dantata added, “Credit note issuance continues to be a challenge. In our industry, over N36bn is pending with the FIRS as Withholding Tax credit note not yet collected and hence cannot be applied for tax settlement.
“There is a need for a definite procedural paper from the FIRS to the MDAs on issuance and collection of credit notes, giving details of timeframe. A mechanism should also be put in place by the FIRS where defaults can easily be reported and addressed.”
Responding, Fowler said based on the record at his disposal, FOCI members were not defaulting in tax payment.
He stated that the FIRS would look into the plea of the body, adding that action would be taken on its request.
Fowler noted, “Your sector is a major player in terms of economic activities in the country and you play a very vital role.”