President of the Federal Republic of Nigeria, Muhammadu Buhari has directed the Federal Inland Revenue Services (FIRS) and related government bodies to plug all revenue leakages by ensuring strict compliance with tax payments by foreign companies in the country.
The president gave the directive at the virtual First National Tax Dialogue held at the Conference Hall of the State House, Abuja. He also stressed the need for the deployment of more digital platforms.
The president ordered all government agencies to automate operations and ensure more synergy in advancing the interest of the nation in revenue generation.
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“It is not enough that our citizens and local businesses pay their fair share of taxes.
”Equally, foreign businesses must also not be allowed to continue to exploit our markets and economy without paying appropriate taxes.
”Accordingly, the FIRS has my mandate to speedily put all measures in place to fully implement programmes to stamp out Base Erosion and Profit Shifting in all their ramifications and generally automate its tax processes.
“In line with this, I have directed all government agencies and business enterprises to grant FIRS access to their systems for a seamless connection.
”FIRS must ensure that its deployment of technology for automation is done in line with international best practices. In particular, FIRS can borrow a leaf from other countries which have successfully automated their tax processes,’’ Buhari said.
“Our government has continued to pursue all those projects despite the massive decline in government revenues occasioned by a combination of factors among which is the COVID-19 pandemic.
“The devastating effect of COVID-19 on the health and economy of the world is evident across every strata of our society.
”It is obvious to every citizen of this country that our economy is not immune from the global economic downturn.
”As such, we have had to confront the conflicting situations of reflating the economy and at the same time raising revenue to meet our budgetary needs.
”It is within this context that the government undertook an expansive budgetary projection of over N13 trillion for 2021.’’
Buhari said the government had “inevitably resorted to deficit budgeting as a result of declining revenues for some years,’’ resulting in to an increase in Nigeria’s debt profile.
”This funding gap created by the dwindling government revenue, therefore, underscores the importance of the national tax dialogue we are holding today.
“No nation has ever made progress without having to pay for it or make the necessary sacrifice.”
”To this end, FIRS is mandated to do all that is required in order to efficiently collect tax revenue due from transactions carried out using local and foreign online platforms.
”The government has made relevant statutory amendment to tax laws in the Finance Act 2020.’’
The president therefore urged citizens to play more active roles in nation-building by paying their taxes.
”The administration is, however, not seeking to increase the tax burden upon the citizens but to plug the existing tax loopholes or leakages and to ensure even and equitable application of the tax laws.
”This was clearly demonstrated by the provisions in the Finance Act 2019, whereby government exempted small companies from tax and reduced the income tax rate for medium companies from 30% to 20%.
”In the Finance Act 2020, which I signed into law at the tail end of 2020, we went further to cushion the burden of tax on the low-wage workers by exempting minimum wage from personal income tax,”
“Every Nigerian must see tax payment in its proper context, which is, as a solemn and patriotic obligation that is necessary for building a better society.’’
