FIRS, Lagos State collaborate on tax audit, information exchange

The Federal Inland Revenue Service (FIRS), has signed a Memorandum of Understanding (MoU) with Lagos Internal Revenue Service (LIRS) on joint tax audit, investigation and automatic exchange of information.

This is contained in a statement issued on Tuesday in Abuja by Mr Johannes Wojuola, Special Assistant on Media and Communication to the Executive Chairman of FIRS, Mr Muhammad Nami.

Wojuola said the MoU was signed in Lagos by the Executive Chairman of FIRS and the Executive Chairman, of LIRS, Mr Ayodele Subair.

He said that the event was witnessed by the Minister of State, Budget and National Planning, Prince Clem Agba and Gov. Babajide Sanwo-Olu of Lagos.

Nami said that the cooperation would enable the two authorities to work as a team in sharing relevant information that would assist both parties in their tax administration and enforcement roles.

He said that it would also provide capacity building between both tax authorities.

“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 the purpose of tax administration.

“With that information, we would be able to 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 are able to implement a presumptive tax regime as far as issues of tax administration is concerned.

“But that is going to happen after we are done with the regulation we are putting together with the Ministry of Finance, Budget and National Planning, which the Minister of Finance would issue in due course,’’ he said.

Nami said that the presumptive tax would be for the purpose of Personal Income Tax and Ground Rent administration in Lagos State.

“Another key issue I want to emphasise is capacity building.

“There are certain things we know as FIRS and would like to share with the State Inland Revenue Service. And there are also areas of specialisation 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 be able to fund their budgetary requirements,” the FIRS boss said.

While emphasising that people enable civilisation through taxes they pay, Nami said that government could not provide critical infrastructure if people don’t pay taxes.

According to him, civilisation globally does not happen by accident, but people or citizens of various jurisdictions, states and countries globally make it happen through the taxes they pay.

“Without funds received by the government through taxes, governments all over the globe would not be able to provide critical infrastructures such as roads, hospitals, internationally rated airports, and schools and cater for security and safety of their citizens.

“With this collaboration, we are confident that Lagos State would earn more revenue from taxes and be able to deliver a 4th Mainland Bridge, Lekki International Airport, which it has already conceived and other critical infrastructure,’’ he said.

Nami appealed to the Lagos State government to continue to give the residents, particularly taxpaying residents value for the taxes they pay.

Sanwo-Olu in his remarks said that the collaboration commenced before 2022 with the intention to improve the fiscal space of the country.

He said that the country’s tax to Gross Domestic Product (GDP) ratio, at around six to eight per cent was unimpressive and unacceptable.

According to him, nationals within the Sub-Saharan region are doing better.

“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 per cent and that is what makes them developed countries.

“It is really an avenue for you to support your government and hold them accountable,” he said

Sanwo-Olu said that with the collaboration, Lagos State was on track to rise above its N1.7 trillion to within the region of four to five trillion Naira.

The Minister of State, Budget and National Planning, Agba commended the two tax authorities for the agreement and appealed to other states to emulate them.


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