Since the FIRS is the only government agency tasked with collecting taxes, the Federal Inland Revenue Service (FIRS) has warned Ministries, Departments and Agencies of Government (MDAs) against using consultants and concessionaires to do so.
The FIRS accused some MDAs of adding tasks of assessment, collection, accounting, and enforcement of taxes and levies in their agreements with concessionaires and consultants in a public notice it released yesterday and signed by its Executive Chairman, Muhammad Nami.
“It has come to the notice of the Federal Inland Revenue Service that some Ministries, Departments and Agencies of Government are appointing concessionaires or consultants for the assessment, collection, accounting or enforcement of taxes and levies due to the Federal Government or any of its agencies.”
“Some MDAs include such functions in their agreements with concessionaires or consultants,” the Public Notice read.
Citing Section 68(2) of its Establishment Act, the FIRS highlighted that by law it is “the primary agency of the Federal Government of Nigeria responsible for the administration, assessment, collection, accounting and enforcement of taxes and levies due to the Federal Government or any of its agencies, except as may be authorised by the Minister responsible for Finance by regulation as approved by the National assembly.”
The Notice further said that while Section 12(4) of the FIRS Establishment Act allowed the Service to employ consultants, accountants, or other agents to perform specific tasks on its behalf, the law clearly forbade consultants from carrying out the tasks of tax assessment and collection.
The law stipulates that: “The Service may appoint and employ such consultants, including tax consultants or accountants and agents to transact any business or to do any act required to be transacted or done in the execution of its functions under this act; provided that such consultants shall not carry out duties of assessing and collecting tax or routine responsibilities of tax officials.”
According to the Notice, going by “the above provisions of the law, it is clear that the duty of administration, assessment, collection, accounting or enforcement of taxes and levies due to the Federal Government or any of its agencies is that of the Federal Inland Revenue Service and its tax officials. No part of these responsibilities can be contracted to a private enterprise by any other MDA.”
The Executive Chairman FIRS further warned MDAs that they were breaking more than just the letter of the law when they hired consultants to help with tax assessment and collection. They were also violating the FIRS Establishment Act, which had been revised.
“Furthermore, appointment or authorisation of any person, other than by the Federal Inland Revenue Service, to assess, collect, enforce or account for taxes constitutes an offence under Section 68(3) of the FIRSEA. Such appointment or authorisation is punishable, upon conviction, with fine, imprisonment or both under Section 68(6) of the Act.
“In view of the foregoing, where any person, individual or corporate, has any information or assistance that may be of use to the Service for the purpose of administration, assessment, collection, accounting or enforcement of taxes and levies due to the Federal Government or any of its agencies or for the performance of its duties under the FIRSEA, such person should approach the Service directly with such useful information,” the Notice read.