TheCable

The Federal Inland Revenue Service (FIRS) says the government is losing revenue to tax waivers been granted to undeserving companies.

Femi Oluwaniyi, coordinating director of FIRS tax operations, said the agency has found that undeserving companies get the pioneer status tax waiver.

Companies involved in activities that qualify for pioneer status are exempted from paying company income tax for an initial period of three years with the possibility of an extension for one or two years.

This incentive is listed in the Industrial Development (Income Tax Relief) Act, which is administratively regulated by the Nigerian Investment Promotion Commission.

According to a statement by Oluwaniyi was addressing a delegation of state commissioners of finance, who paid a visit to the Revenue House, FIRS headquarters in Abuja.

The director said the FIRS has discovered that pioneer status certificates had been issued to companies that were not pioneers of their fields in the real sense, hence undeserving of such status.

He said pioneer status granted “outside the law would not enjoy tax relief regardless of the certificate issued to them” and advised owners of such certificates to regularize their tax positions to avoid sanctions.

The FIRS hinted that it was auditing its findings with the intention of pressing for the cancellation of pioneer certificates issued to undeserving companies in violation of the law.

In his remarks, Muhammad Nami (pictured), FIRS executive chairman, said tax revenue accounted for nearly 70% of what was shared at the last meeting of the federation accounts allocation committee.

Nami said the FIRS could not have achieved this without the support of state commissioners of finance.

The executive chairman charged the commissioners to focus on other forms of taxes like the stamp duty and deduct withholding tax from contracts at the point of payment.

He also said the service needs support with taxpayer sensitisation and education as tax revenue is crucial to helping the government meet its obligations like infrastructure development and salary payment to the citizens.

David Olofu, the head of the delegation and Benue state commissioner of finance, assured that the states were looking forward to working closely with FIRS in order to generate more tax revenue for the country.