The Federal Inland Revenue Service (FIRS) has frowned at what it termed a systemic abuse of the pioneer incentive scheme and other tax waivers instituted by the Federal Government, which has led to a revenue slump for the three tiers of government.
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The Executive Chairman of the Service, Mr Muhammad Nami raised the concerns while hosting State Commissioners of Finance in Abuja recently.
According to him, plans are afoot to immediately block such leakages to unlock more revenue for the three tiers of government.
Nami decried the indiscriminate tax waivers and incentives granted to undeserving companies, which he said has disrupted revenue generation.
He disclosed that the FIRS has since discovered that pioneer status certificates had been issued to companies that were not pioneers of their fields in the real sense, hence undeserving of such privilege. He stated that the development has led to loss of considerable tax revenue to the three tiers of government.
However, the FIRS boss hinted that it was auditing its findings with a view to pressing for the cancellation of pioneer certificates issued to identified undeserving companies in violation of the law.
He stated that pioneer status otherwise granted outside the law would not enjoy tax relief regardless of the certificate issued to them and owners of such certificates were requested to regularize their tax positions, as sanctions shall apply in accordance with the law.
Nami stated that tax revenue accounts for nearly 70% of what was shared at the last FAAC meeting and lauded the collaboration between the Service and the State Commissioners of Finance, saying this is key to bringing about an increase in tax revenue.
He said without this collaboration it would be difficult for the government to meet its obligations to the citizenry in such areas as infrastructure development and salary payment, which could lead to social dislocation.
The Executive Chairman emphasised the need to diversify the economy in order to create more sources of taxable income and increase tax revenue for the nation.
He charged the states to focus on other forms of taxes like the Stamp Duty which he described as “the black gold” which has been ignored before now. He also charged all Ministries, Departments and Agencies to scrupulously deduct Withholding Tax from contracts at point of payment.
Nami also solicited the states’ support in terms of taxpayer sensitization campaigns and education, stating that rental obligation was incomplete without the payment of Stamp Duties. He emphasised that if these initiatives were pursued at both local and state levels more revenue would be generated.
Team lead of the delegation cum Benue State Commissioner of Finance, Mr David Olofu, congratulated Mr. Nami on his well-deserved appointment and on his accomplishments in office so far.
Mr. Olofu assured that the states were looking forward to working closely with FIRS in order to generate more tax revenue for the country.
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