FIRS Proposes Road Infrastructure Tax

The Federal Inland Revenue Service (FIRS) says it is proposing the introduction of Road Infrastructure Tax in Nigeria, to make the informal sector contribute to building a modern society.

The Executive Chairman of the FIRS, Muhammad Nami, disclosed this on Thursday while receiving a delegation of the Nigeria Union of Journalists (NUJ) led by its National President, Chris Isiguzo, in his office, in Abuja.

Mr. Nami reportedly said the proposed Road Infrastructure Tax, to be administered by FIRS, will provide the government with adequate funding for road construction, rehabilitation, and maintenance, as well as providing the needed security for roads in the country.

According to the FIRS Executive Chairman, “The only way to make the informal sector contribute to building a modern society is by making them pay when they use the roads.” He stated.

“That is why we are proposing that government should consider introducing Road Infrastructure Tax in Nigeria.“

He noted that “in many jurisdictions, road users pay for the use of road infrastructure as such it shouldn’t be seen as an additional burden on our citizens because it has the potential of making life better for all of us.”

Speaking further, Mr Nami stated that Nigeria’s economy presently relies heavily on non-oil revenues to discharge its statutory responsibility of paying salaries and providing social amenities to the citizenry.

“Without the tax that you pay governments at all levels would not be able to fulfill their mandate to the electorates. Tax money also helps to ensure the roads you travel are safe and always in good condition,” he said.

Mr. Nami also stated that despite sharp practices by some companies who were in the habit of evading taxes, by shifting their capital and profits to tax havens, as well as low revenue from Petroleum Profit Tax, due to the shortfall in crude oil production among other factors, the FIRS has been putting forward critical reforms that have been yielding positive impact on the Service’s operations.

“Adopting technology in tax administration is crucial in improving domestic revenue mobilization in view of dwindling oil prices in order to avoid falling into a debt crisis. It is against this backdrop that the TaxPro-Max became the channel for filing Naira-denominated tax returns effectively from 7th June 2021.

“The TaxPro-Max enables seamless registration, filing of returns, payment of taxes and automatic credit of withholding tax as well as other credits to the Taxpayer’s accounts among other features. The technology also provides a single-view to Taxpayers for all transactions with the Service,” Mr. Nami explained.

The tax agency official also noted that the management of the Service had established two critical units, the Intelligence, Strategic Data Mining & Analysis Department (ISDMA) and the Tax Incentive Management Department (TIMD) as part of institutional reforms to generate more revenue and forestall revenue leakages.

“While the TaxProMax will serve as the flagship tool for mining data, it will be complemented by other tools that the Intelligence, Strategic Data Mining and Analysis Department department may deploy, with the data engineers in the Department carrying out necessary distillations.

“Management also established the Tax Incentive Management Department to manage, implement and report on tax incentives as provided by relevant extant laws and regulations. The TIMD is specifically in charge of the tax affairs of companies/enterprises enjoying tax exemptions and holidays. Companies enjoying Pioneer incentives, Non-Governmental Organizations (NGOs), Cooperative Societies, companies in Export Processing Zones (EPZ), Free Trade Zones (FTZ), Oil and Gas Export Processing Zones (OGEFZ), those engaged in Downstream Gas Utilization and all others enjoying tax holidays are being managed by the TIMD to forestall revenue leakages, such that these companies/enterprises do not use their status as a cover to earn taxable income and refuse to pay tax on such income,” the FIRS chief said.

He added that the service created 10 Value Added Tax (VAT) Regional Coordination Offices across the country to drive the collection of VAT.