Written by Sarah NEGEDU

FGFG refutes allegations of planned tax raise

The federal government has dismissed media reports alleging a planned tax increase to generate revenue to fund the 2019 budget.

The Minister of Finance, Mrs. Zainab Ahmed, said the federal government only intends to increase its tax base and not increase tax rate as erroneously reported in some quarters.

Mrs. Ahmed while was reacting to the comments credited to her during the public presentation of the 2019 budget highlights, said government has no immediate plans to increase tax rates as earlier speculated in some quarters.

Speaking recently at a press briefing in Abuja she said, “We are not increasing tax rate; we are increasing tax collections by expanding the tax base,” adding that the government is even likely going to reduce taxes to small businesses.

President Muhammadu Buhari had on December 19, 2018, presented a N8.83trillion budget proposal for the 2019 fiscal year before the national assembly.

The document projects a N6.97trillion total revenue, with expected income consisting of oil revenue projected at N3.73trillion and non-oil revenue estimated at N1.39trillion.

The minister was reported to have said her ministry is focused on revenue generation to be able to mobilize more domestic revenue so that it could better fund the nation’s budget which clearly had a deficit.

“You can see from the performance that there is a gap between what is planned for in the budget and what is actually generated. We are doing all we can and very soon we will be releasing new revenue initiatives which will include a new set of taxes on excise duties.

“We will also be working with the Federal Inland Revenue Service and the Nigeria Customs Service on new and enhanced measures for enforcement and compliance.”

But clarifying the issue, the minister said the previously approved luxury taxes would be implemented fully and consumers of luxury products like private jets, and more should brace up to pay more in taxes.

“But we will do everything possible for high network individuals to pay the right amount of taxes.  We will also implement the special luxury taxes that were already approved but not implemented,” the minister assured.

The minister also noted that whilst revenue performance has improved, it is still not meeting set targets “thus warned revenue generating CEOs to up their game or face the consequences.

“Whilst this year’s revenue performance presents an improvement from last year, with a recorded increase of 40 percent as at the end of the third quarter of 2018, this performance is unsatisfactory to our administration when compared with the targets that we set out to achieve with an overall revenue outturn of 53percent in the same period.”

Also speaking at the briefing, the executive chairman, FIRS, Mr Babatunde Fowler, said the federal government will take over 30 properties linked to tax defaulting companies.

According to Fowler, of the 2,000 properties of corporate entities identified early this year that were not paying taxes, 561 of them had come forward to make payments.

He said 116 of them claimed not to own any of the properties, while 30 of them had actually written to FIRS that the properties in question did not belong to them.

“By law, where a company has not filed or paid any taxes, we have to use estimated assessment based on turnover. Out of the 2,000, about 569 have come forward to pay taxes. We have done an assessment of N8billion, while the others have asked for payment by instalment.

“Also, 116 claimed not to own those properties. 30 of them have put it in writing claiming that they do not own the properties in question. We have written accordingly to the Ministry of Finance and we believe that the government will take those properties over in line with the law.”

  refutes allegations of planned tax raise

The federal government has dismissed media reports alleging a planned tax increase to generate revenue to fund the 2019 budget.

The Minister of Finance, Mrs. Zainab Ahmed, said the federal government only intends to increase its tax base and not increase tax rate as erroneously reported in some quarters.

Mrs. Ahmed while was reacting to the comments credited to her during the public presentation of the 2019 budget highlights, said government has no immediate plans to increase tax rates as earlier speculated in some quarters.

Speaking recently at a press briefing in Abuja she said, “We are not increasing tax rate; we are increasing tax collections by expanding the tax base,” adding that the government is even likely going to reduce taxes to small businesses.

President Muhammadu Buhari had on December 19, 2018, presented a N8.83trillion budget proposal for the 2019 fiscal year before the national assembly.

The document projects a N6.97trillion total revenue, with expected income consisting of oil revenue projected at N3.73trillion and non-oil revenue estimated at N1.39trillion.

The minister was reported to have said her ministry is focused on revenue generation to be able to mobilize more domestic revenue so that it could better fund the nation’s budget which clearly had a deficit.

“You can see from the performance that there is a gap between what is planned for in the budget and what is actually generated. We are doing all we can and very soon we will be releasing new revenue initiatives which will include a new set of taxes on excise duties.

“We will also be working with the Federal Inland Revenue Service and the Nigeria Customs Service on new and enhanced measures for enforcement and compliance.”

But clarifying the issue, the minister said the previously approved luxury taxes would be implemented fully and consumers of luxury products like private jets, and more should brace up to pay more in taxes.

“But we will do everything possible for high network individuals to pay the right amount of taxes.  We will also implement the special luxury taxes that were already approved but not implemented,” the minister assured.

The minister also noted that whilst revenue performance has improved, it is still not meeting set targets “thus warned revenue generating CEOs to up their game or face the consequences.

“Whilst this year’s revenue performance presents an improvement from last year, with a recorded increase of 40 percent as at the end of the third quarter of 2018, this performance is unsatisfactory to our administration when compared with the targets that we set out to achieve with an overall revenue outturn of 53percent in the same period.”

Also speaking at the briefing, the executive chairman, FIRS, Mr Babatunde Fowler, said the federal government will take over 30 properties linked to tax defaulting companies.

According to Fowler, of the 2,000 properties of corporate entities identified early this year that were not paying taxes, 561 of them had come forward to make payments.

He said 116 of them claimed not to own any of the properties, while 30 of them had actually written to FIRS that the properties in question did not belong to them.

“By law, where a company has not filed or paid any taxes, we have to use estimated assessment based on turnover. Out of the 2,000, about 569 have come forward to pay taxes. We have done an assessment of N8billion, while the others have asked for payment by instalment.

“Also, 116 claimed not to own those properties. 30 of them have put it in writing claiming that they do not own the properties in question. We have written accordingly to the Ministry of Finance and we believe that the government will take those properties over in line with the law.”

 

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