The Federal Inland Revenue Service (FIRS) has stated that the provisions of the Finance Act 2021 will be used to fund the fiscal year 2022 budget.
The announcement was made by Mr. Muhammad Nami, Executive Chairman of the Federal Inland Revenue Service (FIRS) while delivering the keynote address at the KPMG Webinar on Nigeria’s 2022 Budget and the Finance Act 2021.
The FIRS will “use the instruments of the Finance Act 2021, in collaboration with taxpayers and key stakeholders, to ensure adequate funding of the country’s budget and raise the necessary financing for national development,” according to Nami.
The Finance Act “provided a framework for equitable treatment, automation and deployment of ICT infrastructure, a single agency for tax collection, taxation of the digital economy, and other critical interventions for improved tax administration in the country,” according to the FIRS chief.
According to Mr. Nami, “in the past, situations abound where certain goods or services were streamed into Nigeria by non-resident companies, particularly to consumers, without paying Value Added Tax” (VAT).
This development, he says, “raised the issue of equity, because goods and services offered by domestic companies are subject to VAT.”
He also stated that “companies deriving income from Nigeria but lacking a physical presence can now be assessed on a fair and reasonable percentage of their turnover in accordance with Section 30 of the CITA.”
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Those who continue to obstruct the achievement of this goal will now be fined N25,000 per day.
Muhammad Nami also stated that the Finance Act’s amendment to Section 68 of the FIRS Establishment Act addressed taxpayer complaints about multiple government agencies requesting tax payment.
However, Section 68 of the FIRS Act was amended by the Finance Act 2021 to make it clear that the FIRS is the sole agency responsible for tax assessment, collection, and enforcement.
As a result, taxpayers can look forward to a more efficient tax administration regime in the future.”
Mr. Nami stated that the Service would use compliance and enforcement strategies, as well as intelligence and strategic data mining and analysis, to provide intelligence and information to improve its audit and investigation functions, while also lowering the prevalence of tax evasion in the country’s incentive management.
