Tax Harmonisation: FIRS Signs MoU With LIRS for Joint Tax Operations and Audit
- The Lagos State Internal Revenue Service and the Federal Inland Revenue Service are moving to harmonise tax payments in Lagos
- The two tax bodies signed a Memorandum of Understanding to both widen and grow the tax net in the State
- Both top shots witnessed the ceremony in the federal finance minister and Lagos State Government
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The Federal Inland Revenue Service (FIRS) on Monday, February 6, 2023, signed a Memorandum of Understanding (MoU) with the Lagos Internal Revenue Service (LIRS), where the two tax authorities would collaborate on joint tax audit, investigation, and automatic exchange of information.
The MoU signing ceremony took place at the State House, Marina, Lagos State, Monday, February 6, 2023, and was executed by the Executive Chairman, FIRS, Muhammad Nami, and the Executive Chairman, LIRS, Ayodele Subair, and was witnessed by the Honorable Minister of State, Budget and National Planning, Prince Clem Agba as well as the Lagos State Governor, Babajide Sanwo-Olu.
Source: Facebook
MoU to strengthen harmony between the tax bodies
The MoU establishes a joint FIRS, LIRS Audit, and Investigation team that would oblige the two tax authorities to share relevant information to assist them in their tax administration and enforcement roles while also providing for capacity building between both authorities.
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During the ceremony, the FIRS Executive Chairman noted that the cooperation would enable the two authorities to work as a team to achieve the set objectives.
Nami said:
"We will carry out a joint audit and investigation as a team; we will also conduct an automatic exchange of information for gathering data for tax administration. With that information, we could carry out tax administration seamlessly.
"In addition to that, what we are going to introduce administratively because of our joint operation, is to ensure that we can implement a presumptive tax regime as far as issues of tax administration are concerned.
"But that will happen after we finish with the regulation we are putting together with the Ministry of Finance, Budget and National Planning, which the Honourable Minister of Finance will issue in due course.
"The presumptive tax would be for Personal Income Tax and Ground Rent administration in Lagos State.
"Another key issue I want to emphasize is capacity building. We know certain things as FIRS and would like to share them with the State Inland Revenue Service. And there are also areas of specialization you have that we expect you to share with us through capacity building.
"The major objective of this collaboration is to raise enough funds for Lagos State government and the Federal Government to fund their budgetary requirements."
In his message to the people of Lagos, Nami stated that "civilization globally does not happen by accident" but that "people or citizens of various jurisdictions, states, and countries globally make it happen through the taxes they pay."
Lagos to earn more taxes via harmonisation
Nami explained that with funds received by the government through taxes, governments all over the globe would be able to provide critical infrastructures such as roads, hospitals, internationally rated airports, and schools and be able to cater to the security and safety of their citizens.
According to reports, Nami said that with this collaboration, FIRS is confident that Lagos State would earn more tax revenue to deliver a 4th Mainland Bridge and the Lekki International Airport to Lagosians.
In his remarks, the Lagos State Governor, Babjide Sanwo-Olu, stated that this collaboration commenced over a year ago to improve the country's fiscal space.
He noted that the country's tax-to-GDP ratio, at around six to eight per cent, was unimpressive and unacceptable, stating that other nationals within the Sub-Saharan region were percent better.
Sanwo-Olu said:
"Other nations, even within the Sub-Sahara region, are doing between 14 to 15 per cent. If you talk about developed countries, they are doing 35 to 40%, making them developed countries because it is really an avenue for you to support your government and hold them accountable."
Sanwo-Olu noted that with this collaboration, the State was on track to rise above its N1.7 trillion to within the region of four to five trillion Naira.
The Honorable Minister of State, Budget and National Planning, Prince Clem Agba, commended the two tax authorities for this landmark agreement and appealed to other states to follow suit.
FIRS Sets new record collects over N10trn revenue in 2022, Buhari hails achievement
Recall that Legit.ng reported that the Federal Inland Revenue Service (FIRS) collected more than N10 trillion in 2022, its highest revenue collection in a single year.
According to Punch, It is also the first time the FIRS will cross the 10-trillion naira mark in tax revenue collection.
The information was revealed in the "FIRS 2022 Performance Update," a report signed by the company's executive chairman, Muhammad Nami, and made public on Monday, January 23, 2023.
Source: Legit.ng
