FIRS Says it’ll Start Deducting Tax from Defaulters’ Bank Accounts and Seize their Assets
Nigeria’s tax collection agency, Federal Inland Revenue Service (FIRS), will now deduct tax liabilities directly from bank accounts of defaulters due to the mounting debt profile of companies, corporations, ministries, departments, and agencies (MDAs), the body said in a statement.
According to the agency, the drastic measure is within its constitutional authority. Section 31 of the Federal Inland Revenue Service (Establishment) Act, 2007 (as amended) empowers the FIRS to recover owed taxes from defaulters.
In January this year, the FIRS Chairman, Muhammad Nami, had revealed that Nigeria lost $178 billion to tax evasion by foreign multinationals between 2007-2017.
In the statement released on Wednesday by the FIRS spokesman, Abdullahi Ahmad, the agency said it had issued notices to the defaulters severally but they failed to comply, noting that actions, including prosecution, will now be taken against them without further notices.
He accused companies and MDAs of willful negligence, tax evasion, and unlawful conversion of government property.
Ahmad stressed that the FIRS will move “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).”
However, the defaulters have been given a 30-day ultimatum, after which the agency will enforce its stringent measures to recover the necessary debts. The FIRS had earlier issued a 60-day deadline to MDAs to pay their outstanding tax liabilities.
President Muhammadu Buhari had in January instructed MDAs to grant the FIRS access to their records in a bid to block revenue loopholes in the country.
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