The Federal Inland Revenue Service (FIRS) has generated over N23billion in unpaid taxes from the recently suspended substitution exercise on corporate bank accounts, marked by the imposition of restriction on the accounts of tax-defaulting organisations.
FIRS Chairman, Babatunde Fowler, who spoke in Lagos on Thursday at the Manufacturers Association of Nigeria (MAN) Interactive Forum on Tax Matters as guest speaker, said the focus of exercise was 3,000 firms deducting Value Added Tax (VAT) and Withholding Tax (WHT) on behalf of the Federal Government without remitting such. The companies, he said, had no tax identification and therefore could not remit the deducted taxes to government, making them treat such deductions as part of their cash flow.
Fowler stated that the suspension of the exercise for 30 days, announced last weekend, was occasioned by the deluge of corporate taxpayers visiting FIRS offices to regularize their tax affairs and make payments, a situation that stretched the service administratively, as it could not lift the lien on their accounts as quickly as it wished.
Thus, the FIRS directed banks to lift restrictions on such accounts to allow affected tax companies regularise their tax status within 30 days and begin to make arrangements for the liquidation of their tax liabilities. According to the FIRS chief, the Service’s decision to place lien on accounts of businesses, corporate organisations and partnerships with an annual banking turnover in excess of N1billion, but without tax identification, was announced at a stakeholders’ meeting last September.
Photo Caption: FIRS Chairman, Babatunde Fowler,