FIRS Generates Over N23bn From Corporate Accounts of Defaulters

• FIRS Generates Over N23bn From Corporate Accounts of Defaulters

The Federal Inland Revenue Service (FIRS) generated over N23 billion in unpaid taxes on corporate bank accounts suspended in its substitution exercise.

The FIRS Chairman, Mr Babatunde Fowler, disclosed this at the Manufacturers Association of Nigeria (MAN) Interactive Forum on Tax Matters in Lagos on Thursday.

The Chairman said the focus of the exercise was 3,000 firms deducting Value Added Tax (VAT) and Withholding Tax (WHT) on behalf of the government without remitting them.

The companies, according to him, had no tax identification and therefore could not pay the deducted funds to the federal government, making them treat the deductions as part of their cash flow.

“Our position was that if you charge VAT, which is not your money; or deduct Withholding Tax from vendors and you have no tax identification, you cannot even pay tax to the FIRS because you can’t pay without tax identification. So, these operators were defrauding the society and the nation by charging consumers VAT, by deducting Withholding Tax and not remitting on behalf of other taxpayers. We had over 3,000 of such and we said if they do not come forward, we’d follow the law and do what they call substitution. Now, what the Act actually says is that the banks should deduct the amount of taxes from accounts. We, however, told the banks not to deduct the amounts, but put a lien on those accounts and let the taxpayers come forward. And till date, over N23billion has been paid on those accounts,” he said.

Fowler, however, said the exercise has been suspended for 30 days due to the huge number of corporate taxpayers visiting FIRS offices to regularise their tax affairs and make payments, adding that the situation stretched the agency administratively, hence making it unable to lift the lien as quick as it wishes.

The agency has now directed banks to life restrictions on such accounts to allow affected firms to regularise their tax status within 30 days.