FG Begins Probe of Contractors’ Tax Records

tax relief
  • FG Begins Probe of Contractors’ Tax Records

The Federal Government has started reviewing the tax compliance records of all contractors who have received payments from the Federal Government and its various agencies in the last seven years.

A statement said this followed the results of a sampling exercise conducted by the Ministry of Finance which found out that only less than 20 per cent of government contractors stated the income received from the Federal Government in their tax returns.

From the reviewed contractors, it was discovered that many contractors made no declaration at all.

The sampling exercise showed that some Tax Clearance Certificates, which were presented at the point of contract award, were found to have little bearing to the true value of business conducted by the contractors.

However, the Minister of Finance, Mrs. Kemi Adeosun, has said that with the new multi-agency, data-driven approach, it will be easier for tax authorities to cross check information provided in tax declarations to ensure that the correct taxes are paid.

Already, the Federal Inland Revenue Service, as part of its automation efforts, has eliminated issuance of handwritten TCC as it continues to implement other reforms.

The Ministry of Finance and Office of the Accountant- General of the Federation are now compiling detailed records of all payments exceeding N100m made in the last seven years including details of the beneficiary bank accounts and other details.

According to the statement, all agencies have 30 days to return the information on payments made, and accounting officers are required to certify the accuracy of the data supplied. Deliberate omission or manipulation of data by accounting officers will attract sanction.

The initiative is part of the construction of a central data base of financial information being developed for use in tax compliance.

The database project dubbed ‘Project Light House’ is aimed at building comprehensive profiles of tax payers using a wide range of available data sources, including the Bank Verification Number, foreign exchange allocations, land registry records, and information obtained from foreign governments.

The data will be used to cross check information provided to the tax authorities.

While explaining the President Muhammadu Buhari-led government’s commitment to improving tax compliance, Adeosun stated that Nigeria’s low level of tax compliance was at variance with the collective desire to reduce dependence on oil and to become a prosperous nation that provides for all its citizens.

The minister was quoted to have said, “It was a matter of concern that those who earned money directly from government, which is both traceable and verifiable, still failed to pay the correct taxes thereon.”

She urged such companies to promptly take advantage of the concessions offered under the Voluntary Assets and Income Declaration Scheme.

She added that once an audit or investigation had commenced, a company or individual would not be able stop that process by participating in VAIDS.

About the Author

Samed Olukoya
Samed Olukoya is the CEO/Founder of investorsking.com, a digital business media, with over 10 years' experience as a foreign exchange research analyst and trader. A graduate of University of East London, U.K. and a vivid financial markets analyst.

Be the first to comment on "FG Begins Probe of Contractors’ Tax Records"

Leave a comment

Your email address will not be published.


*