AMID dwindling revenue resources, the Federal Inland Revenue Service (FIRS) says it will be embarking on a nationwide Value Added Tax (VAT) and Withholding Tax (WHT) compliance exercise from July 2022.
The FIRS Executive Chairman, Muhammad Nami, gave this information in a public notice issued on Friday June 10, 2022.
Nami said the exercise was coming on the heels of an earlier notice by the Service to commence the enforcement and recovery of unremitted tax deductions owed the Federation by some states and local governments.
According to the notice, the VAT and Withholding Tax Compliance monitoring exercise would involve teams of FIRS officers visiting selected taxpayers and taxable persons, including non-governmental organisations (NGOs) and government ministries, departments and agencies (MDAs) to review their VAT and Withholding Tax records.
In the notice, Nami highlighted that the exercise would cover the 2016 to 2020 accounting years for taxable persons whose records had been audited by the Service up to the 2015 accounting year.
He clarified that for taxpayers whose records had not been audited by the Service up to 2015, the exercise would be extended to include the prior years that had not been tax-audited.
The Service urged all taxable persons or tax agents who had made deductions of VAT or WHT on its behalf to immediately remit all such deductions to the FIRS within two weeks of the notice.
The notice stated that those who would be visited during the monitoring exercise would be notified and informed of the required documents for review beforehand.
Despite the FIRS always affirming it was meeting its revenue targets, Nigeria has resorted to borrowing to to the tune of N41.6 trillion under President Muhammadu Buhari’s watch.
Nigeria’s Minister of Finance, Zainab Ahmed, had in January during this year’s budget breakdown, said the government spent N4.2trn on debt servicing between January and November 2021.
The sum represents 76.2 per cent of the N5.51trn revenue generated during the period under review.
Analysts say the development puts Nigeria on the spot and makes it a chronic debtor.
The immediate past Director-General of the Lagos Chamber of Commerce and Industry (LCCI), Muda Yusuf, observed that a large portion of Nigeria’s domestic borrowing was through ways and means, which he said had serious implications for inflation.
Ways and means is a mechanism for the government to borrow from the Central Bank of Nigeria (CBN) under a specified credit policy which, most times, entails printing money.
Harrison Edeh is a journalist with the International Centre for Investigative Reporting, always determined to drive advocacy for good governance through holding public officials and businesses accountable.