The Economic and Financial Crimes Commission (EFCC) in conjunction with the Federal Inland Revenue Service (FIRS) and revenue services from various states has recovered a total of N27.6 billion being unremitted withholding taxes from 6 commercial banks in the country.
Breakdown of the recoveries so far
N26 billion was recovered from one bank by the EFCC, while N1.6 billion was recovered from 5 other banks. The agency plans to investigate 7 other banks in the country
What is withholding tax ?
Withholding tax is one of the most popular form of taxation in Nigeria. It is paid on contract for supplies, services, director fees, dividends, interest, and so on. In the case of dividends, the tax is deducted upfront, and is expected to be forwarded by the banks.
Withholding Tax is collected by both Federal and state governments. Companies registered as a Limited Liability Company will take their Withholding Tax Credit Note to the FIRS whilst companies registered as a Partnership or Sole Proprietorship will take their’s to the State Inland Revenue Service (In Lagos, it is the LIRS).
The EFCC was established in 2003. The Act establishing the commission empowers it to prevent, investigate, prosecute and penalise economic and financial crimes. The EFCC is also charged with the responsibility of enforcing the provisions of other laws and regulations relating to economic and financial crimes.
The FIRS started as part of a colonial tax organisation under the name Inland Revenue Department of Anglophone West Africa. The department’s scope of administration covered Nigeria, Ghana, Sierra Leone and the Gambia.
In 1943, the Nigerian Inland Revenue Department was carved out of the Inland Revenue Department of Anglophone West Africa and established as an autonomous body under the supervision of the Commissioner of Income Tax.