By; NIYI OGUNGBOLA, Abeokuta.
The Chairman of Federal Inland Revenue Service, Babatunde Fowler Monday revealed that about 27.5 million business owners across the country in the informal sector are not paying their taxes.
Mr. Fowler stated this Monday in Abeokuta, after a courtesy call on Governor Ibikunle Amosun in his Oke-Mosan office to herald the 135th meeting of the Joint Tax Board.
Fowler who is also the Chairman of the Joint Tax Board, operators of the small scale businesses claimed to have 37.5 operators while only 10 million was captured in the database.
He said there are other small enterprises not captured by the operators that are also not paying taxes.
Fowler however explained that close to 700,000 corporate accounts have been added into the tax net in the last six months through the Board.
He also explained that Chairmen of states revenue services have agreed to add minimum of 10 million individuals to tax net before the end of December this year.
He said, “Actually some of the taxes are seasonal and also we are putting strategies in place to make sure everyone pays their taxes as and when due.
“Over the last six months or so, we’ve added close to 700,000 corporate accounts and among ourselves as members of the Joint Tax Board which also includes State Boards of Internal Revenue, we have put ourselves under heavy pressure to make sure that we bring more people into the tax net.
“Also, we have exchanged information between the Federal Inland Revenue Service and all the State Boards of Internal Revenue to make sure that everyone who is on a tax database of a state is also on our tax database and we have also given them information about our own tax payers.
“So, we have more people in the tax net. We’ve also started the enforcement process which I’m sure you distinguished members of the media are aware of for companies or individuals who are not paying their taxes; we have taken action against them.
“Let me break that down into sectors. We have the individual in the informal sector and we also have corporate account. Now, I’ll give you a little idea of the position within the informal sector.
“Those in the small scale business areas claim they have over 37.5 million members. What we have on our database nationwide, as individuals, is only 10 million.
“That shows you there is about 27.5 million individuals who are not paying taxes. But we also have small enterprises, small businesses that are not paying taxes.
“But among us as members of Joint Tax Board, all the states chairmen have agreed to add a minimum of 10 million individuals before December 31st.
“So, we are going round the whole nation preaching the word, hoping that people realize that we cannot continue to rely on oil revenue. That we have to chip in to make sure that Nigeria continues to improve.”
According to him, “this feat is not just achieved because of the ability of the state government but also because of the trust the citizens have in the leadership of the state”.
Mr. Fowler commended the state government for making the Nigerian tax system more efficient and commended it for supporting the State Internal Revenue Service, urging other states to brace up to achieve the joint goal.
Meanwhile, Ogun State Governor, Senator Ibikunle Amosun, has canvassed a review of the sharing formula of revenues accruing to the federation account through non-oil taxes including Value Added Tax (VAT).
He said, “The non-oil revenue sharing formula currently in use is obsolete. As at the time it was done 20 years ago, Ogun State, for instance was way back because of the number of industries we had then. Today, Ogun State is the industrial capital of Nigeria.
“The sharing formula should reflect this new reality. This is derivation in another form.”
Amosun however said, “It is a good thing that for the first time in the life of this administration, non-oil receipt accounted for over 70 percent of the fund shared at the last FAAC. It is a commendable and a welcome development because it signifies a major shift in focus from oil to non-oil revenue.
“But in the same token, I think it is very expedient to ask that we cast a second look at the formula we use in sharing the proceeds from these non-oil revenue.
“If we make a lot of money from industries, we should also remember that these companies reside in a state and they put enormous pressure on the environment and the roads in those states. Those various state governments carry the can and pick the bill for cleaning the environment. It is therefore only good for the management of RMFAC to give more back to those states hosting these companies.”
