The Federal Inland Revenue Service (FIRS) says tax
defaulters instituting legal cases against the agency will pay 50 percent of
the assessed amount in dispute into an interest-yielding account of the federal
high court before hearing.
Muhammad Nami, executive chairman of the FIRS, disclosed
this on Friday during a public hearing organised by the House of
Representatives committee on public accounts investigating revenue leakages
arising from tax waivers and incentives to foreign companies granted pioneer
status.
He said the new rule is contained in a recent practice
direction issued by Justice John Terhemba Tsoho, the chief judge of the federal
high court, Abuja, under Order 57 rule 3 of the federal high court (civil
procedure) rules, 2019.
According to him, the practice direction took effect from May 31, 2021.
He further stated that the management “had initiated a
process for a memorandum of understanding (MoU) with critical stakeholders as
far as information sharing and amendments to the relevant laws are concerned”.
“We have gotten several amendments to our tax laws which
require companies operating in the free trade zones to file tax returns on
their operations to the FIRS,” he said.
“These amendments aim to check the activities of taxpayers
currently taking advantage of some gaps in our tax laws and fiscal policy by
establishing businesses in the nation’s tax-free zones.”
He emphasised that such companies produce goods meant for
export and then sell the goods to the custom’s zone, making it impossible for
the companies in the area to operate competitively with them.
Nami said FIRS has set up a high-power committee with the
National Investment Promotion Commission (NIPC) to look into issues of tax
waivers and granting of pioneer status.
He maintained that tax evasion and tax avoidance are global
phenomena relating to fiscal policy issues. He then urged the National Assembly
to, as a second step, amend the relevant tax laws that would make it almost
impossible for these companies to exploit loopholes in our tax laws to shift
both profits and taxes to their countries of origin.
Nami pointed out that taxes not paid to Nigeria or waived by
the Nigerian government are returned to the treasury of defaulting companies’
home countries operating in Nigeria, hence the need for legislation to address
the issue.
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