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Tax number wiII be mandatory for company registration – FIRS

By on August 16, 2015

The Federal Inland Revenue Service is currently discussing with the Corporate Affairs Commission to make it mandatory for companies to obtain their Tax Identification Number at the point of registration.

The Director, Communications and Liaison Department, FIRS, Mr. Emmanuel Obeta, disclosed this to our correspondent during an interview in Abuja.

The move, he said, is part of measures to be used by the FIRS to capture more companies into the tax net, thus improving revenue for the Federal Government.

The Chairman, FIRS, Mr. Sunday Ogungbesan, had put the number of companies in Nigeria at 450,000, but lamented that only about 125,000 paid any form of tax.

He also said that the FIRS was given a revenue generation target of N4.5tn by the Federal Government in 2015 and had so far generated N2.667tn.

He said that the estimated collection for July 2015 was N404bn. This, he said, was 106 per cent of the monthly target of N381.02bn and brings total collection to date up to N2.374.18tn, against the target of N2.667.13tn, and improves collection percentage to 89 per cent.

Going by Ogungbesan’s summation, not less than 325,000 companies are evading tax, thus denying the FG of huge revenue annually.

But while the Service could not estimate the actual amount lost to tax evasion, Obeta said the FIRS, through the collaboration with the CAC, would be able to determine the level of turnover or business activity of a company within the year.

This, according to him, will enable the FIRS to discourage situations where organisations submit fake annual returns of their activities within the year.

He said, “The collaboration with CAC is still ongoing, such that FIRS will gain an immediate access to all the data of registered companies and such companies can also obtain their TIN at the point of registration from the CAC.

“The number was obtained from a physical validation or enumeration exercise. A lot of the other registered companies are portfolio companies without visible validation of their existence at their given addresses.”

On tax evasion, Obeta said, “It will be difficult to estimate the amount that the Federal Government is losing to tax evasion as we don’t know the actual revenue earned by everybody in the country that are not paying taxes.”

Ogungbesan had said that the service was considering rewarding tax payers, and noted that those evading taxes would first be enlightened on the importance of payment of taxes.

According to the FIRS boss, after the enlightenment, any firm and/or individual that fails to pay their taxes will face the full wrath of the law.

He had said, “The duty of every Nigerian as of January 1 is to go to the tax office and pick a form, to assess himself. We are undergoing a self assessment tax regime at the moment.

“There is a continuum we call compliance continuum. These are those who are complying and there are those at the extreme end who, no matter what action you take, no matter the intervention, no matter the encouragement, still will not comply.”

 

[Punch]