Petroleum tax falls by N390bn – FIRS

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The Petroleum Profits Tax collection for the year has dropped by N390bn from a target of N1.48tn to N1.09tn, the Acting Executive Chairman, Federal Inland Revenue Service, Mr. Babatunde Fowler, has said.

According to him, over 200 oil and gas companies operating in the country have not filed their tax returns for the year.

Due to the significant drop in oil prices, he said that a huge gap existed between the revenue generated by the FIRS and the total revenue by other government agencies like the Nigerian National Petroleum Corporation, Department of Petroleum Resources and the Nigeria Customs Service between July and September this year.

Speaking at the KPMG tax breakfast meeting and the unveiling of it’s Tax Risk Management Survey in Lagos on Thursday, Fowler said that while the FIRS contributed N852.365bn to the Federation Account in the three months, the other three revenue generating agencies contributed N491.975bn.

He pointed out that the decline in oil revenue had made it necessary for the Federal Government to focus on non-oil taxes.

As a result, he explained that compliance was expected by all organisations and that the agency was prepared to remove bottlenecks associated with tax collection, adding that one such way was joint tax audits of companies by the FIRS and the states’ Boards of Internal Revenue.

Other interventions, according to him, are “nationwide tax registration drive, with focus on Value Added Tax, which commenced on October 12, 2015, to bring in all unregistered taxpayers into the tax net; 35,650 corporate taxpayers and 22,000 individual taxpayers registered in 26 days.

“A nationwide VAT and Withholding Tax compliance check was also commenced on the same date. Tax registration forms have been simplified for ease of use by taxpayers. The forms, which are currently in use nationwide, were reduced from 13 pages to one page, and the fields to be filled were reduced from 115 to 20 for corporate organisations, and 35 for individuals.”

In addition, he announced that structures that would make compliance easy for taxpayers such as the Integrated Tax Administration System, which would automate the registration, filing and audit of taxes, as well as multiple tax payment channels, such as e-tax pay and VAT auto collect, would be activated in 2016.

The acting FIRS executive chairman noted that the three public notices that had been issued on VAT and WHT compliance check, payment of tax without Tax Identification Number and payment of tax on declaration of interim dividends had generated over N117bn from September to date.

To encourage compliance, Fowler said, “As a start, we have written letters to the major firms, including KPMG, identifying some of their non-compliant clients. KPMG has acted commendably in this regard as a number of its clients have filed returns after we sent out the letter.

“We urge you to ensure that the rest file their returns before the month end.”

Source: Punch