FIRS decries under-declaration, tax evasion by prominent Nigerians

The Federal Inland Revenue Service (FIRS) said high-net-worth Nigerians and businesses are under-declaring their assets, thus short-changing federal and state governments of their tax revenues.

The Special Assistant, Media and Communication to the Executive Chairman, FIRS, Johannes Wojuola, disclosed this during a courtesy visit of the FIRS team to The Guardian corporate head office in Lagos yesterday.

He said the total personal income tax of the richest man in South Africa, who is also the second richest in Africa, is more than the total internally-generated revenue of all 36 states of Nigeria, raising questions about the sincerity of wealthy Nigerians.

Wojuola said, ironically, the richest man in Africa is a Nigerian, noting that most of the high-net-worth individuals have their assets outside the country.

“Our system operates in a situation where the state government collects personal income tax. Whatever the wealthy people declare, the governor cannot tell them they are under-declaring except they do not want second terms in office,” he stated.

He said this is among the issues the FIRS is putting forward in terms of reforming the country’s tax systems through harmonisation of data to ensure more collection and the right people pay the right taxes.

He said the FIRS has also proposed for the federal government or the FIRS to be given the powers to tax high net worth individuals or assets of individuals in Nigeria abroad.

According to him, government officials and high-net-worth individuals can’t be living an ostentatious lifestyle while asking citizens to do their part.

Wojuola said once this is achieved the exact money accrued to the country will be collected.

“With such a situation, we will not be having this unusual disparity where the second richest man in Africa is paying more tax than the entire IGR of all states in Nigeria that have the richest man.

“Part of the Taiwo Oyedele-led committee, the mandate given to it is to look at how we can also reduce the number of taxes generally collected in the country and focus on the high revenue earning taxes,” he said.

The Technical Assistant to The Executive Chairman, FIRS, Olarinde Olufemi, said section 24 of the Federal Constitution mandates every citizen to declare their income lawfully and pay their taxes to the relevant agency of government.

“Now whether you earn income in Nigeria or not, especially those in Europe and doing business in Nigeria and receiving their money. The law says if you do business in Nigeria, you have a significant economic presence in the country and you will pay tax like every Nigerian company because you are competing with other businesses in Nigeria and you are paying no tax. It is a competitive disadvantage to local companies,” he said.

He called on the support and partnership of the media as critical stakeholders in tax collection to ensure the government does its part of accountability and delivery as well as calling out issues when they exist.

“When we see the government spending outrageous sums on needless projects, it is also on the part of the media to call it out because it is your tax money at work.

When we begin to hold them accountable for our tax money and how they spend it, we will see the benefits of our taxes,” he said.

The Managing Director/Editor-in-Chief, The Guardian Group, Martins Onoja, pointed out that the country has taxation without representation problems and does not fund the infrastructure with it.

He said people in developed economies that don’t have anything to do with oil, spend whatever they get from tax and are highly industrialised.

She said they are entrepreneurial nations and manufacturers as they have integrated systems of tax collection.