Senate has ordered the management of the Federal Inland Revenue Service ( FIRS) to go after companies that failed to pay their due taxes in 2015 as shown in the report of the Auditor General of the federation. In the report it was said that FIRS failed to recover up to N17. 690 billion from different companies that have refused to pay their taxes to the coffers of the government. The unrecovered taxes are made up of Value Added Tax( VAT), Company Income Tax( CIT), Withholding Tax ( WHT), Education Tax ( EDT) and NITDEF. According to the 2015 Audit report from the Office of the Auditor General for the Federation that was forwarded to the Senator Matthew Urhoghide led Senate Committee on Public Accounts to investigate, the addresses of some of these erring companies as claimed by the revenue generating agency could no longer be traced. The Senate has however ordered the Executive Chairman of the agency, Muhammad Mamman Nami, to go after the defaulting agencies for recovery of the money and remit the money into the Consolidated Revenue Fund ( CRF) within 90 days.
Meanwhile The Federal Inland Revenue Service (FIRS) says it has appealed a recent judgment of the Federal High Court in Port Harcourt, Rivers State, on the issue of Value Added Tax (VAT) collection. Mr Abdullahi Ahmad, Director, Communications and Liaison Department of the FIRS said this in a statement in Abuja. “This is to inform the general public that the FIRS has lodged an appeal against the judgment of the Federal High Court, Port Harcourt Judicial Division, delivered by Hon. Justice Stephen Pam, in SUIT NO. FHC/PH/CS/149/2020-Attorney General of Rivers State v. Federal Inland Revenue Service & Another. “We have also sought an injunction, pending appeal, and a Stay of Execution of the said judgment. As the decision is being appealed and in view of the pending applications for injunction and stay of execution which the FIRS has filed in court against the judgement, members of the public are advised to continue complying with their Value Added Tax obligations. The public should continue to comply until the matter is resolved by the appellate courts, in order to avoid accruing the consequent penalties and interest for non-compliance” he explained.
Senate order is as a result the queries issued against FIRS and 104 other public agencies by the Office of Auditor – General of the Federation in the 2015 Audit report that were adopted by the Senate. The Senators also directed the FIRS to sanction its officers involved in alleged overlapping contracts and splitting between 2014 and 2015 and remit N32. 449 million into government coffers within 90 days with evidence of compliance submitted to the Auditor – General and the Senate Public Accounts Committee. The Auditor General in the query on the N17 billion unrecovered taxes by FIRS had said “The Federal Inland Revenue Service failed to recover the total sum of N17.690 billion from different companies in the year under review. Though the FIRS in its response to the query said it had recovered N2,879,152, 077.76billion but actual receipted recoveries made by FIRS was N273, 038,474.74million , leaving a balance of N17,417,303,090.90billion to be recovered.
“Several companies were also discovered to have defaulted in filling their Annual Returns many of which FIRS said could not be located due to change of addresses” The Senate in adopting the report, directed the Chairman of FIRS to recover the money and pay to the Consolidated Revenue Fund , just as it ordered that all companies that failed to file their annual returns must be blacklisted. The Senate said, ” Evidence of compliance should be forwarded to the Public Accounts Commitee.” The Senate was also tough in its resolutions on alleged contract overlapping and splitting by some officers of the revenue generating agency by calling for their identification and sanctioning.
The query read “A contract for the sum of N32, 667,600.00million awarded by FIRS , was split and distributed to four companies , whose submissions were earlier rejected , mainly to accommodate the approval ceiling of the Chairman , contrary to Financial Regulations 2921. The Audit also revealed that a total of N32, 449,743,61million contracts under recurrent expenditure were awarded by the agency in the 2014 financial year and paid for in the month of January , 2015, contrary to financial regulation 414(b).” Not happy with the development, the Senate in adopting the report , directed FIRS to pay the money back into government coffers and submit evidence of compliance to the office of Auditor General of the Federation and its Committee on Public Accounts. FIRS going by the Senate’s resolutions on the N17billion unrecovered taxes and N32million Contracts splitting and overlapping, has about 60 days left to make the required recoveries and remittances into the Consolidated Revenue Fund ( CRF).
