The Federal Inland Revenue Service [FIRS] has delisted two banks from the list of collecting banks on account of tax fraudExecutive chairman of FIRS, Mrs Ifueko Omoigui-Okauru disclosed this in Abuja at a workshop on E- payment of Taxes and rendition of returns by Ministries, Departments and Agencies [MDA]
According to her, some collecting banks were in the habit of misappropriating taxes collected on behalf of FIRS instead of remitting same to the organization
Specifically she said banks collude with MDAs to use the tax revenue to award further contracts without remitting the money as required by law.
Omoigui, who was represented by Cordinating Director, Support Services, Alhaji Kabir Mashi also revealed that banks aid the MDAs to misappropriate tax revenue by declassifying tax types.
Disclosing that the more frightening scenario is where the taxes deducted were not remitted leading to very heavy debt overhang, Omoigui said the FIRS could no longer tolerate this as some punitive measures would be applied
“The MDAs after collecting the taxes use the tax revenue to award further contracts without remitting the money as required by the law. In some cases, there is criminal collusion between these MDAs and some of the banks in the misappropriation of the money. In some situations, we have experienced where the correct deductions of amount were made, the classification of the various tax types were not indicated” she said.
To halt this negative trend she said it was imperative to sensitise the MDAs on the new development as there is urgent need for prompt payment of taxes through e-payment and returns to be made accordingly
Though she acknowledged the fact that the process of e-payment may not be too easy, the FIRS boss said it wouldl ease out with time as the process is faster, simpler and more convenient.
“The new process being introduced may face some challenges at the boss beginning but on the long run it shall be simple, faster and more convenient to all. This workshop is therefore expected to discuss and find a lasting solution to any hindrance you may experience in the e-payment” she noted.
To this effect, the FIRS Chairman directed that all deductions concerning the Withholding Tax (WHT), Value-Added Tax and Pay As You Earn (PAYE) to be made within the specified period according to the provisions of the law and in the appropriate format.
For the banks, she said that FIRS has made arrangements to make the process easier with the banks, adding that she will not tolerate any misconduct that will be contrary to the agreement signed with the banks.
It will be recalled that all banks are serving as collecting banks in the old system. In the new system lead banks are to be appointed as FIRS raised N4.5 billion, the minimum non tradable Treasury bills which Lead Banks are to lodge with the Central Bank of Nigeria while Collecting banks are to deposit the minimum non tradable Treasury bills of N1.5 billion in non tradable bills in favour of the FIRS as collateral.
