The Federal Inland Revenue Service (FIRS) has signed a memorandum of understanding with the Nigerian Communications Commission (NCC) that would allow it to verify value-added tax remittance by telecommunication companies.
According to a statement signed by Henry Nkemadu, NCC director of public affairs, the MoU allows FIRS to integrate an application programming interface (API) tech solution with the systems of telcos.
Nkemadu said the API would allow FIRS independently verify the VAT to be paid by mobile network operators rather than rely “entirely on the operators’ books of accounts”.
Muhammad Nami (pictured), FIRS executive chairman, said the MoU represents a shift to electronic-based business activities towards ensuring that tax transactions to the federal government are accurate.
Nami said the API, which was developed in-house, is transaction-based.
Umar Danbatta, NCC executive vice chairman, said the appropriate processes were undertaken to conclude the MoU as the commission took its time to understand and work out its import.
Danbatta said the API would only help to ascertain VAT accuracy and not to degrade the quality of service delivery from telcos or lead to the high cost of service to their consumers.
“Our concern, as regulators of the telecoms industry, is that we needed to be sure that it is not another way to tax telecoms operators, who are already dealing with multiple taxation issues,” the EVC explained.
He also said the commission ensured that the integration will not “in any way, impact the cost and quality of service delivery by the operators to telecoms consumers”.