Tuesday, June 22, 2021

FIRS to deduct tax from defaulters’ bank accounts, other assets

“The service shall, without further notice, apply the provisions of Section 31 of the Federal Inland Revenue Service (Establishment) Act, 2007 (as amended) to recover taxes due from the defaulters’

• May 6, 2021
Federal Inland Revenue Service, FIRS
Federal Inland Revenue Service, FIRS

The Federal Inland Revenue Service (FIRS) says it will begin to deduct tax liabilities from defaulters’ bank accounts.

FIRS’ move to deduct tax liabilities directly from bank accounts followed the rising debt profile of companies, corporations, ministries, departments, and agencies.

In a statement on Wednesday, Abdullahi Ahmad, FIRS’ spokesperson, said the tax agency considered drastic measures to recover taxes and prosecute defaulters for wilful negligence, tax evasion, and unlawful conversion of government property.

He said the agency was working in line with Section 31 of the Federal Inland Revenue Service (Establishment) Act, 2007 (as amended), to recover owed taxes from defaulters.

Mr Abdullahi added FIRS was ready to take steps “to recover taxes due from the defaulters’ asset in the custody of any person, including but not limited to sums standing to its credit with a financial institution in Nigeria.”

He added, “It becomes clear, following these notices, that any MDA, company, corporation and other collecting agents that fail to comply with the directive stands the risk of having all outstanding taxes deducted directly from their bank accounts or statutory allocations, or have their other assets seized by the FIRS and turned over to the Government of the Federation in lieu of the withheld taxes.

“The service shall, without further notice, apply the provisions of Section 31 of the Federal Inland Revenue Service (Establishment) Act, 2007 (as amended) to recover taxes due from the defaulters’ asset in the custody of any person (including but not limited to sums standing to its credit with a financial institution in Nigeria).” 

It further revealed that a notice was issued mandating defaulters to pay within 30 days.

The agency had earlier issued a 60-day ultimatum to MDAs to clear outstanding tax liabilities.

In January, President Muhammadu Buhari had asked government agencies to grant the FIRS access to their systems for effective service delivery.

Mr Buhari explained that the directive followed the government’s move to block revenue loopholes.

Also, in that month, the FIRS Chairman, Muhammad Nami, disclosed that Nigeria lost $178 billion to tax evasion by foreign multinationals between 2007-2017, adding that Nigeria accounts for 30.5 per cent of illicit financial flows in Africa.

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