FIRS Goes After States, Local Govts Over Unremitted Tax Deductions

The Federal Inland Revenue Service (FIRS) has indicated a resolve to enforce and recover unremitted tax deductions by some States and Local Governments in Nigeria.
This is contained in a Public Notice, signed by its Executive Chairman, Muhammad Nami.
Nami is worried that most States and Local Governments have failed to remit to the Service Withholding Tax (WHT) and Value Added Tax (VAT) deductions from payments made to contractors and service providers by them as required by law.
He highlighted relevant portions of the Companies Income Tax Act (CITA) and the Value Added Tax Act (VATA), saying that Ministries, Departments and Agencies of Government, as well as Parastatals and other establishments are expected by law to deduct certain taxes while making payments to third parties and remit those deductions to the FIRS.
“The provisions of Sections 78(3), 79(3), 81 of the Companies Income Tax Act (CITA), and Sections 9(I), 13(1) of the Value Added Tax Act (VATA), mandate Ministries, Departments and Agencies of Government (MDAs), Parastatals and other establishments to deduct WHT and VAT while making payments to third parties and remit same to the Service.
“By the provisions of the relevant laws, States and Local Governments are statutorily mandated, as agents of collection, to deduct at source and remit to the Service, all taxes deducted, within twenty-one days.”
The Notice by the FIRS boss said that most States and Local Governments have failed to comply with these provisions of the law, despite appeals from the FIRS.
“However, it is regrettable to note that most of the States and Local Governments have failed in their responsibilities of remitting WHT and VAT deducted from payments made to contractors and service providers as required by law.
“The implication is the huge tax debts owed by the States and Local Governments.
“All entreaties by the Service to ensure the remittance of the established unremitted tax deductions by the defaulting States and Local Governments have been unsuccessful as a result of lack of cooperation in adopting the e-payment platforms provided by the FIRS for a seamless deduction and remittance of these taxes.”
The notice said that as a result of the failure to remit by defaulting States and Local Governments, the Service will advise the Federal Government and the Minister of Finance, to henceforth decline approval of any request for the issuance of state bonds or other securities in the capital market; as well as requests for external borrowing and approval for domestic loans from commercial banks or other financial institutions.
The tax authority same said that it would also publicly name and shame the defaulting States and Local Governments while publishing the amounts owed in unremitted tax deductions.
It said that it would also invoke the provisions of Section 24 of its Establishment Act which empowers the Accountant General of the Federation to deduct at source, from the monthly FAAC allocations, un-remitted taxes due from any government agency and to thereafter transfer such deductions to the Federation Account and notify the Service.
The FIRS called on all defaulting States and Local Governments to promptly remit all unremitted tax deductions within 30 days of the publication of the Notice to avoid it taking these enforcement actions.
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Political Parties’ Failure To Respect INEC Timetable, Implications For 2023 Elections, By Ahmed Y. Hassan
Currently, Nigeria is at a crossroads and the 2023 general election is deemed to be very important. In fact, it is an eagerly anticipated event that will either make or mar Nigeria as a nation.
As such, it is high time citizens remembered that politics is too important a matter to be left solely in the hands of politicians, especially Nigerian politicians who are known to skew things to work in their favour.
While most political parties are already busy deciding their flag bearers for various political offices, the dilly-dallying on the primaries, leading to the readjustment of the Timetable and Schedule of Activities for the 2023 General Election, is below par.
After the Independent National Electoral Commission (INEC) released its timetable and schedule a day after the Electoral Act 2022 was passed, it was forced to readjust the timeline to allow the parties conclude their primaries.
The INEC timetable had 14 activities from the publication of notice for the elections. The third activity on the timetable is the conduct of primaries by political parties. This was expected to be for 60 days and should have been completed by June 3, 2022.
Sadly, all 18 registered political parties scheduled their Presidential primaries for the last seven days of the period earmarked for the exercise, making it impossible for INEC to make progress with its original schedule.
At the May 9 edition of the regular quarterly meetings between the election umpire and stakeholders’ and Inter-Party Advisory Council (IPAC), the 18 political parties had requested that INEC considered an extension of the timeframe by another 60 days (2 months).
They argued that the time given was too short. They also said they needed more time so they could fully comply with the provisions of the new Electoral Act 2022.
After the request was turned down, the parties wrote the commission again on May 12, reminding it of their request for extension. The request was turned down a second time.
INEC finally granted an extension on May 27 when IPAC called for an emergency meeting with the Commission. During the meeting, the political parties presented a modified request for a one-week extension.
The new extension period is expected to be from June 4 to 9.
However, INEC is yet to specifically list out the activities it expects the parties to have carried out within the new timeframe.
The next activity on the timetable is the submission of list of candidates for Presidential and National Assembly elections. This is expected to place between June 10 and 17.
Obviously, the lack of respect for the election timetable and schedule by the parties would have affected the overlapping activities in the election process if the 6-day grace granted by the commission was not in the plan – thankfully the election timetable remained essentially unaltered.
With INEC’s timetable and schedule already set, and a deadline given to parties to conduct primaries, failure of some parties to do so before June 3, shows disrespect for the commission, which could have caused problems for the election and put the timetable into doubt, had INEC not given a 6-day grace whilst maintaining the election timetable.
While it is sad that only a few parties have conducted primaries, many have indicated their desire to seize the opportunity of the 6-day extension to reschedule their primaries. INEC should have no reason to welcome any further request of extension from the parties.
INEC is not also expected to succumb to any unilateral decision that will benefit any political party, going forward.
Interestingly, parties are expected to submit their lists of candidates of candidates to INEC as soon as the primaries are concluded.
Four officials from each of the 18 political parties, making a total of 72 officials in all, would be trained on the use of the INEC portal where submission is expected to be made. It is easy to see how the failure of these political parties will directly affect the training.
While it is commendable that INEC decided to train the political party officials to make efficient and effective use of the portal, there is also the need for the training to be done on time. The political parties must also take proper advantage of the opportunity to avoid delay relating to technical problems.
As the rest of the world watches the electioneering activities in Nigeria with keen interest, it is important that all stakeholders play their parts not only on the ‘Election Days’ but in the many activities that precede the period to ensure a free and fair election.
Hassan wrote from Birmingham, England.