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LCCI warns FIRS on damage to economy by freezing corporate account

by Business News Report

 Council of Lagos Chamber of Commerce and Industry LCCI has urged the Federal Inland Revenue Service FIRS, and the banks to exercise utmost restraint in the adoption tax revenue recovery strategy because of the grave implications for investors, financial inclusion and the economy as a whole stating that  “the damage to the economy may be much more than the contemplated revenue”. The Council in a statement signed by its Director General Mr Yusuf Mudal warned “Revenue generation is not an end in itself, it is a means to an end.  The ultimate objective is to ensure equity, improve welfare of citizens, create jobs and promote the advancement of the economy.  The activities of agencies of government should be in tandem with the Ease of Doing Business Agenda of government and the promotion of the ideals of the Economic Recovery and Growth Plan [ERGP]”.  

According to Mudal “Council expressed concern over reports by many corporate bodies bordering on freezing of their accounts and subsequent debiting of such accounts by the Federal Inland Revenue Service [FIRS] on account of tax defaults.  This move was premised on the powers conferred on the FIRS by section 31 of the FIRS Act which gives FIRS the powers to appoint collection agents for the recovery of tax payable by the taxpayer.  Council affirmed that LCCI is a strong proponent of regulatory compliance by private sector players.  However, it is important to underscore the fact that tax administration should be in consonance with the basic tenets of the rule of law and the fundamental principles of a good tax system.  Tax administration should be consistent with the principles of equity, fairness, legality, accountability and due process. 

“Taxpayers should be given ample opportunity to defend their positions on tax matters before a lien is placed on their bank accounts.  There are instances where company accounts were frozen in error because there was no proper engagement, documentation or communication with the tax payers.  The disruptions to businesses resulting from a sudden freezing of bank accounts for reasons of alleged default in tax payment has caused irreparable reputational damage to many businesses”.  On payment of subsidy claims, the Council said “The Council of the Chamber notes and commend the payment of the first tranche of outstanding petroleum subsidy claims to the tune of N237 billion in promissory notes.  The meeting commended the intervention of the Central Bank of Nigeria in the granting partial interest waivers for the marketers on their indebtedness to the banks.  LCCI Council urged the government to effect the payment of the balance of the subsidy claims without delay.  The meeting also proposed the expeditious passage and assent of the Petroleum Industry Bill and the deregulation of the sector to put an end to the recurring subsidy problem”.

The LCCI Council reiterated the imperative of a peaceful conduct of the forthcoming elections.  It stressed the need for the elections to be free, fair and credible.  The council underscored the critical importance of the neutrality of INEC, the security agencies and the Judiciary in the electoral process.  It stressed that a peaceful environment is crucial for political stability, economic progress, social stability and societal cohesion.  No significant investment will take place in an environment that is politically and socially unstable. The LCCI Council urged the politicians and other actors in the political space to conduct themselves with decorum and in line with the rule of law.  Politicians should refrain from intemperate utterances that could stoke divisive tendencies and conflicts in the country.

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