GOVT BANS TAX CONTRACTORS IN STATES, IGP TO ENFORCE POLICY
  Monday, 21 October 2013 22:54
Written by Mathias Okwe, Assistant Business Editor, Abuja

•  Moves to end multiple taxation
•  Bars federal MDAs from collection

IT is now a crime for any state in the country to engage anybody or an organisation other than the Board of Internal Revenue Service (BIRS) to collect approved taxes.
  These taxes are to be published soon by the Joint Tax Board (JTB), an umbrella body of all tax jurisdictions of the three tiers of government in the country.
  The new policy, which is with immediate effect, will henceforth attract serious penalties for any state that contravenes it. Accordingly, the JTB has been instructed to “immediately monitor compliance or otherwise by all tax authorities and report cases of infraction to the National Economic Council (NEC) for action.”
  This is one of the high points of the new road-map for the implementation of NEC’s resolutions on harmonisation of taxes and levies across the federation developed following complaints  to the Federal Government by operators of the real sector under the aegis of Manufacturing Association of Nigeria (MAN) in the country that the multiplicity of taxes and levies country-wide numbering over 79 were impinging on their expansion and was equally responsible for the shutdown of some businesses in the country.
  The implication of the new policy to states and the Federal Capital Territory (FCT) Administration is that it will lead to downturn in their internally-generated revenue (IGR) which at the moment is buoyed by the appointment of tax contractors who in most instances are not tax professionals and who introduce all manner of levies to raise revenue for the states. 
  Normally, the compensation for these contractors is based on a percentage, hence the more revenue they raise, the more their level of reward. This understanding is the attraction for the contractors to introduce illegal levies and employ thugs who sometimes manhandle citizens to force compliance.
  The immediate past Executive Chairman of the Federal Inland Revenue Service (FIRS), Mrs. Ifueko Omogui-Okauru, campaigned vigorously against the syndrome and even sought a law to outlaw the practice which normally renders the statutorily recognised tax administrators in the states redundant and leaves tax-payers at the receiving end.
  Stakeholders, comprising Federal Government’s representatives led by the Co-ordinating Minister for the Economy and Minister of Finance, Dr. Ngozi Okonjo-Iweala and state finance commissioners as well as representatives of local councils in Nigeria, met yesterday to adopt the tax policy in Abuja.  
  The policy stated in part: “Tax authorities should desist from engaging the services of consultants, and agents to assess and collect taxes and levies listed in the Taxes and Levies Act as this is in contravention of Section 2(1) of the Act. States should be strongly advised to discontinue this action immediately.”
  Another major outcome of the new tax road-map is the resolution banning Federal Ministries, Department and Agencies (MDAs) from collection of taxes and levies because this is a violation of the Taxes and Levies Act.
   The resolution said: “Mr. President is to issue an Executive Order to all federal MDAs to stop collection of taxes and levies in violation of the Taxes and Levies Act and also directing the Inspector-General of Police to dismantle all road-blocks across the federation for tax collection. Commissioners of Police will be required to ensure compliance within states.”
  This action, under the road-map is a short-term measure and is expected to be concluded by the end of 2013. To enforce this, the NEC Secretariat is mandated to work with the Head of Service and the Office of the Accountant-General to prepare the draft Executive Order and a memo for the Vice President to convey the decision of NEC to the President.
  Okonjo-Iweala had earlier while disclosing the discussion of the review resolution appealed for the understanding and co-operation of the states in the final adoption of the resolution, saying that the scourge of multiple taxation was harmful to the nation.
  She gave a background to the committee’s task and the expected outcome of its assignment: “As we all know, the issue of multiple taxation is one, which has been on the front-burner for many years now in Nigeria. Despite several attempts by the government to tackle this issue, it has remained unabated - affecting both big and small businesses and the movement of goods and services in the country.
  “This is particularly harmful to the economy because multiple taxation increases the cost of doing business in Nigeria, discourages local trade and investment and also gives a negative perception of the Nigerian business environment to foreign investors. According to the MAN report, some states have as many as 97 different taxes, levies and charges that are imposed on businesses. This is simply not economically viable - the costs to the government of administering these various taxes and the costs to business of paying these taxes outweigh their benefits to both the private businesses and the government. A recent World Bank report shows that for every 100 naira that businesses have to pay in taxes, they pay about 35 naira in compliance costs. This is a waste of capital that could be reinvested in these businesses to grow them and create more jobs for our economy. By streamlining and harmonising taxes across the federation, we would increase Nigeria’s productive potential.
  “In addition, the multiplicity of taxes on the transportation of goods impairs the integration of internal markets and the establishment of a fully integrated economic space within Nigeria. By impairing the integration of the national market, these mobile levies also reduce competition between companies located in different states in Nigeria. With increased competition, we could bring down prices for consumer goods produced by these companies and make our local companies and exports more competitive in the global market.
  “The implementation of these recommendations will not only increase economic efficiency but also make enforcement simpler. Reducing the total number of taxes paid, increasing transparency as to how and what to pay, and facilitating procedures for filing taxes, will be essential to reducing high compliance costs and in so doing, increase Nigeria’s tax compliance rate and also the revenue. This is going to be a historical piece of work. We are very happy to embark on it because it is something that needs to be done. I know that uncertainty in the tax environment makes it difficult for businesses to thrive. Therefore, we have to have a transparent process that makes it easy for people to know what taxes and levies to pay and to harmonise these activities across the country.”
  Okonjo-Iweala then challenged the stakeholders that they must view the task set before them as an important component of the President’s transformation agenda.
  The Acting Chairman of the FIRS, Alhaji Kabir Marshi and the Secretary, JTB, Alhaji Mohammed Abubakar Lawal, in separate presentations expressed delight at the development and said the new resolution would bring sanity to the tax profession in the country. 

http://www.ngrguardiannews.com/index.php/news/426-national/136351-govt-bans-tax-contractors-in-states-igp-to-enforce-policy

Tinubu's Alpha-beta should take note

karl max: Tinubu's Alpha-beta should take note

Exactly!

what i read there is that states should be "strongly advised"

Does that mean the policy is not mandatory for states? and thus Tinubu's ABC can roam free

This wud be one of d BEST things to happen to Businesses in Nigeria and d Economy for that mata, IF 'it' can be Implemented. And it is a Big IF!..... How does d Govt hope to implement this? Is there a subsiting law they hope to enforce? How wud the Govt stop States and LGAs from collecting these plenty/suffocating taxes which have become for many of them a 'veritable' source of sleeze, corruption and patronage- even when this is supposedly a decision of NEC?? Can d FG even be able to effectively stop its own MDAs, who also 'collect' sm of these crazy taxes/levies??..... How I wish this can be Implemented effectively. It wud hv been such a GAME CHANGER. I wish we all spend more time in pursuing issues like this, in stead of been so obsessed by meaningless Sentimental things that may only make us feel 'goods', temporarily. Here, are d sorts of things we shld be making 'lots of Noise' about; BUT just like d PIB, Oronsaye Reports and Special Courts/Judges for Corruption Cases, I expect us to 'forget' soon enuf.....

This is one law that will restore sanity in the Tax and Revenue Generation Industry, little by little, the corruption is disjointed. Alpha Beta should henceforth stop coming to me for any form of Revenue Collection, I will not pay to ABC except LIRS, Tinubu Please Be Guided. (I laugh in AlphaBeta)

We do not make Noise, We Make Moves.

Fresh Air

Like many other previous laws - it wont work - - Space bookmarked till Next year

who is going to enforce it - Please ...............

Alpha Beta has never collected tax on behalf of Lagos State government, what they have always done is to help the government assess the tax to be collected, they also go after those who have been evading taxes, this policy does not affect them one bit.

karl max: Tinubu's Alpha-beta should take note

You took the words out of my mouth.

I think the activities of the national union of road transport workers should be streamlined as well. Some drivers that pass through multiple states to their destinations especially the commercias pick-ups and lorries are frequently forced to part with reasonable amount of money just because they apply the roads. Some of them either avoid some states or dont embark on long distance journey.

Pssshhh!
On paper. . .Good idea
In the real world. . .It won't work.
This is naija.

In ota alone, these blood sucking vampires have crippled businesses. These tossers, look at the size of your building and then generate a figure for you to pay. These levies are negotiable deepnding on your negotiation skills.

Don't bother going to LGA office to report or make enquiries. If you must, do not mention the name of your organisation. Their cronies and fellow rapscallions are laced everywhere.

hercules07: Alpha Beta has never collected tax on behalf of Lagos State government, what they have always done is to help the government assess the tax to be collected, they also go after those who have been evading taxes, this policy does not affect them one bit.

In one breath 'Alpha Beta has never collected tax on behalf of Lagos State government'. In another breath 'they also go after those who have been evading taxes'

Spot the difference.

Ok

Dreal1247: I think the activities of the national union of road transport workers should be streamlined as well. Some drivers that pass through multiple states to their destinations especially the commercias pick-ups and lorries are frequently forced to part with reasonable amount of money just because they apply the roads. Some of them either avoid some states or dont embark on long distance journey.

My Bro, those are d LGA people.. They are perhaps d Greatest NUISANCE in this whole mess

Give us true federalism and all these madness would stop!!!

I do not believe the Federal government has the power to direct State governments on how the latter enforce their constitutional right to levy and collect taxes.

This can only be done by law, through the National Assembly.

OMO IBO:
In one breath 'Alpha Beta has never collected tax on behalf of Lagos State government'. In another breath 'they also go after those who have been evading taxes'

Spot the difference.

Read my post very well, Alpha Beta are assessors, they help the government identify those who are evading taxes, that is the meaning of going after those who evade taxes, imagine a company that has not paid taxes for some time or is declaring income below what it has earned, it is the job of alpha beta to do the intelligence work to determine that the company is owing, thereafter, the tax guys in the LASG will swoop on the company, please educate yourself more on what alpha beta does for lagos state.

Billyonaire: This is one law that will restore sanity in the Tax and Revenue Generation Industry, little by little, the corruption is disjointed. Alpha Beta should henceforth stop coming to me for any form of Revenue Collection, I will not pay to ABC except LIRS, Tinubu Please Be Guided. (I laugh in AlphaBeta)

We do not make Noise, We Make Moves.

Fresh Air

See how you exposed yourself? Did you ever pay to ABC? Obviously you havent been paying your tax!

scribble: what i read there is that states should be "strongly advised"

Does that mean the policy is not mandatory for states? and thus Tinubu's ABC can roam free

When you are advised to withdraw from Uni, I guess you know what it means.

Semi-illiterates yelling Alpha Beta without the understanding that a tax advisor or strategist is different from a collector. Alpha Beta as well as I know is a consultant to the Lagos Government advising on strategies to decrease the tax gap by plugging loop holes in tax legislations for a commission. They also design IT systems for efficient tax administration in Lagos. Aspire does the same for HMRC in the UK.

It is standard practice for such advisors to receive a percentage of the amount generated. For example, if a tax consultant is able to reduce my tax burden, he gets a percentage of my savings. It is standard and reason why taxation is a very lucrative part of accounting. Some tax consultants take 10%, others take 20%, some could take as much as 30 to 40%.

It is what your knowledge as a professional can earn you.

Someone should please send this memo to emperor Ameachi and his gang of levy collectors.
They are sure killing businesses in rivers state.

Now, one can have some level of sanity in Onitsha and Aba. Particularly Aba where T.A Orji boys, always weilding long sticks in their right hands, & torch-sized Indian hemps in their left hands, run after innocent citizens to extort monies. They impose illegal levies and can even ask you to provide a receipt of your birth, your hair cut, your shoes, belt, pen, etc!

Good move if implememted,kudos to the technocrats,i wish our activicts can look into relevant issues like this one, wish everyone one can voice out their support for this good move,if wishes were horses.

The federal government cannot legislate for the state

Kwakwakwa!! TA Orji and co take note