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FIRS Intensifies Crackdown on Tax Defaulters: 45,000 Companies on the Radar.

FIRS Intensifies Crackdown on Tax Defaulters: 45,000 Companies on the Radar.

 FIRS Intensifies Crackdown on Tax Defaulters: 45,000 Companies on the Radar.

FIRS Intensifies Crackdown on Tax Defaulters: 45,000 Companies on the Radar- Highlights

The Federal Inland Revenue Service (FIRS) has taken an aggressive step by opening an operation in the whole of Nigeria that aims at investigating over 45, 000 companies that are suspected of tax evasion, in a bold move to salvage the depreciating revenue base of the country. The tax net has been widened and the tax leakages in different sectors closed partly due to this new wave of the implementation of the enforcement by the FIRS.

“Many of these companies have been operating under the radar. We are now deploying data analytics and AI tools to track and bring them into the tax net,”
— Zacch Adedeji, Executive Chairman of FIRS.
Source: BusinessDay NG

What’s Happening?

Target Group: The FIRS is targeting enterprises in the finance, oil and gas, tech and business sectors.

 The identification of defaulters is now being carried out with the use of advanced data tools as well as partnership with the banks, CAC and BVN systems.

 If they do not respect this, some firms can be subjected to asset freeze or court seizure.

This bold step should help to increase the non-oil revenue Nigeria especially at a time when oil earnings are not as relied upon as they used to.

The importance things to note are

  • The economy of Nigeria has always been plagued with tax evasion. Although there are thousands of active businesses, very few pay their fair share. This crackdown Gives a tremendous message to defaulters.
  • Be the cause of the increase in funds allocated to roads, education and health by the government.
  • May however rubs some businesses the wrong way as they feel overwhelmed by tax agencies.

What to Expect :

Compliance Rate: Are companies going to regularise their records on a voluntary basis?

Legal Opposition: Will there be a lawsuit or opposition by the private sector?

Revenue Results: Will it reflect on an evident quarterly growth in the next quarterly reports?

The crackdown by the FIRS is a way of reminding people that tax is not optional. The fact is that the government is getting more and more data-driven, which makes being invisible more and more complicated. To business-men, it is not too late to be tax-compliant.

But with the New tax regime under this present regime it might be difficult for the usual defaulters to invade TAX.

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