Federal Government to audit tax payment of over 450,000 registered companies in Nigeria

The game appears up for most tax-evading companies in the country as the Federal Government would soon commence tax-audit of all the 450,000 firms operating in the country.
The essence of the audit is to catch the companies that have been short-changing the government by avoiding paying tax, the Federal Inland Revenue Service said on Sunday.
Statistics provided by the FIRS showed that only 125,000 companies, representing 27.7 per cent of the 450,000 firm operating in the country, paid any form of tax. The remaining 325,000 have been evading taxation.
The FIRS, in a statement on Sunday, said a special audit of all the companies would be carried out, in collaboration with audit firms, and tax consultants.
In the statement, the Director, Communications and Servicom Department, Mr. Emmanuel Obeta, explained that the decision to carry out the exercise was reached at a meeting between the Acting Executive Chairman, FIRS, Mr. Babatunde Fowler; and audit firms, chartered accountants, tax consultants and other professional service providers.
The statement added that the exercise would be carried out within 30 days and would take into consideration the various year ends and peak points of activities of the various companies.
Fowler was said to have pointed out that the collaboration between the professional service providers, states Boards of Internal Revenue and FIRS would mark a turning point for taxation as well as reduce the country’s reliance on oil.
The statement read in part, “The meeting focused on the need to harmonise exchange of information across all the revenue authorities as well as ensuring a synchronised auditing of all the various companies in the country.
“At the end of their deliberations, the meeting agreed to share information with members of the National Assembly, particularly on tax laws, in collaboration with other professional bodies as well as relevant stakeholders.
“They also resolved that FIRS, state Revenue Boards and the various audit firms will carry out joint audits of the various companies to ensure accuracy of the exercise, enhance transparency and drive compliance.
“These audits will be completed within 30 days and will take cognisance of the various year ends and peak points of activities of the various companies.”
The statement quoted Fowler as saying that the input from stakeholders was necessary for the expansion of the nation’s tax net, information dissemination, building capacity of tax administration as well as sharing information that would promote voluntary compliance.
He said, “Irrespective of the fact that we have a duty to advice taxpayers, we equally have obligation to government in ensuring increase in revenue collection.
“It’s time to stop all forms of unwholesome practices in tax related issues because Nigerians need us at this critical time to reposition the country for more resources.
“We don’t have all the answers we need you from both sides to reposition the entire process. All we are asking for is your cooperation to move the nation’s tax system to another level through your support and other stakeholders’’
The tax practitioners, who spoke during the meeting, were said to have called for adherence to professional code of ethics among stakeholders at all time.

Photo: Executive Chairman, FIRS, Dr. Babatunde Fowler