The Lagos Internal Revenue Service (LIRS) and the Federal Inland Revenue Service (FIRS) have signed a memorandum of understanding (MoU) by both agencies to establish a joint FIRS and LIRS audit and investigation team aimed at encouraging the exchange of information between both agencies.

The collaboration is expected to improve tax administration to enhance tax revenue generation, create a robust database and improve the country’s tax-to-GDP ratio.

The agencies will establish a joint audit or investigation team called ‘FIRS-LSBIR JAIT’.

In a communique issued on Wednesday after a brief meeting with Ayodele Subair, the executive chairman of LIRS, and Muhammad Nami, the executive chairman of FIRS.

They both charge citizens to provide full support and cooperation to their agencies for the overall economic benefit of all stakeholders.

According to the agencies, the MoU signed will improve tax administration by reducing tax compliance costs, thereby enabling ease of doing business in the country.

While speaking on the MoU signed by both agencies, Mr Subair, the executive chairman of LIRS, said the importance of the agreement was to foster greater collaboration between the two agencies.

“There is no reason to debate the above as it has been established that tax compliance and good governance are expected to co-exist as the undividable social contract that binds citizens and governments anywhere in the world,” Mr Subair. “Therefore, citizens and governments are expected to fulfill their end of the bargain in achieving a balance.”

Mr Nami said the MoU would enable both agencies to work as a team by sharing relevant information that would assist both parties in their tax administration and enforcement roles that would build capacity between both tax agencies.

The communique assured the public that employees of both agencies would abide by the code of conduct and ethical compliance to ensure that the MOU implementation does not negatively impact the taxpayers and the agencies.

The communique stressed that while the notice was issued for the information and guidance of the general public, taxpayers and tax practitioners in line with the memorandum of understanding, the collaboration between both agencies in the area of exchange of information will ensure efficiency, accurate assessments and increased revenue for funding of government expenditure.