Thousands of Nigerians have been identified as tax defaulters by the Federal Inland Revenue Service (FIRS) through the bank accounts substitution initiative embarked upon by the agency earlier this year.
The number of tax defaulters: While speaking in Lagos at a stakeholders’ forum and the official presentation of the “Nigerian Tax Outlook 2019”, the FIRS Executive Chairman, Mr Babatunde Fowler, disclosed that about 55,000 tax defaulters were discovered.
How FIRS achieved a record-breaking 2018
The tax regulator reported a record-breaking N5.3 trillion revenue in 2018. According to Fowler, the application of technology and other initiatives aided the performance.
He also listed the Service’s tax amnesty and Voluntary Assets and Income Declaration Scheme (VAID) as factors that enabled the positive result the tax agency recorded for the year 2018.
“We had the tax amnesty in 2016 and we were able to generate N96 billion from people who had not declared or paid their taxes, there is also the VAID, which equally threw up declaration of N92 billion, we also organised the stakeholders meeting requesting all to come forward, register and pay their taxes.
“At the meeting, we were able to identify over 3,700 companies that have banking turnover of one billion and above annually for three years, with no tax ID and payments.
“We went further to the banking sector earlier this year to find businesses and operators of bank accounts with a N100 million turnover, but no tax identity.
“Surprisingly, we were able to discover 55,000 non-compliance and non-tax payers among us.”
Fowler Clarifies the crisis surrounding VAT
Nigeria’s Value Added Tax has been generating some heat in the past weeks after Fowler reportedly told the Senate Committee on Finance that one of the ways the Federal Government intends to fund the new minimum wage is to increase VAT. But the FIRS later denied that their Chief ever suggested any percentage increase.
Now, while speaking at the stakeholders’ forum, Fowler stated that VAT is for the good of the people and not created to cause hardship on Nigerians. According to him, VAT only affect those who earn a living and can afford to pay for their daily needs.
He even cited economies like UAE, Ghana, and Saudi Arabia who have suddenly become the toast of investors simply because their citizens were committed to tax payment.
“VAT simply means consumption tax. A lot of people have been saying VAT is a hardship on the poor but I say that it is a support to them.
“An increase in VAT would definitely translate to a better life to the vulnerable in the society including the poor, needy and less privileged.
“If you don’t have money to consume, VAT is not your problem, you first of all need to have the ability and disposable income to spend, before you can be charged VAT.”
“It is a source of revenue to the state governments, 85 per cent of the revenue collected from VAT is shared among the state governments, who are supposed to directly impact my life and yours.
“It is used to assist the needy, to provide free education, free health care, social services, etc. So, when we are talking about an increase, we are talking of more support to the needy.”
His statement comes after All Progressive Congress’ national leader, Bola Tinubu spoke against VAT increment.