Tax Evasion: FIRS Plans Direct Deductions From Defaulters’ Bank Accounts

Federal Inland Revenue Service (FIRS) has served public notices to tax defaulters notifying them of its plan to recover taxes due from their assets in the custody of any person, including sums standing to its credit with any bank or financial institution in Nigeria.

The revenue agency said it took the decision following the rising cases of willful and illegal withholding of taxes collected by companies, corporations, Ministries, Departments and Agencies (MDAs) as well as other agents of collection.

The FIRS gave the hint in a statement issued yesterday by its director in charge of Corporate Communications, Abdullahi Ahmad.
Those concerned are required to pay all outstanding tax liabilities to the FIRS within 30 days from the date of publication of the notice.

FIRS had issued a similar notice to MDAs demanding payment of all outstanding tax liabilities to the Service within 60 days from the date of publication of the notice.

“It becomes clear, following these notices, that any MDA, company, corporation and other collecting agent that fails to comply with the directive stands the risk of having all outstanding taxes deducted directly from their bank accounts or statutory allocations, or have their other assets seized by the FIRS and turned over to the Government of the Federation in lieu of the withheld taxes,” the statement said.

According to the agency, the move is in line with the Section 31 of the Federal Inland Revenue Service (Establishment) Act, 2007 (as amended).

The FIRS stated: “Sections 78, 79, 80, 81 and 82 of the Companies Income Tax Act (CITA) Cap. C21, Laws of the Federation of Nigeria (LFN), 2004 (as amended) and Sections 14, 15 and 16 of the Value Added Tax (VAT) Act Cap. V1, LFN, 2004 (as amended) imposed obligations on companies, corporations and other relevant persons as agents of collection, to collect, deduct or withhold taxes (as the case may be) on supply of goods and services or payments and to remit same to the Federal Inland Revenue Service (the Service) within stipulated time frame.

“The Service shall, without further notice, apply the provisions of Section 31 of the Federal Inland Revenue Service (Establishment) Act, 2007 (as amended) to recover taxes due from the defaulters’ asset in the custody of any person (including but not limited to sums standing to its credit with a financial institution in Nigeria).”

The FIRS said it would take all necessary steps to prosecute defaulters for willful negligent, tax evasion, unlawful conversion of government property, etc. as the case may be.