The Federal Inland Revenue Service, in a bid to encourage the voluntary payment of taxes, is considering granting incentives to firms and individuals.
The Acting Executive Chairman, FIRS, Mr Samuel Ogungbesan, gave the indication on Wednesday in Abuja during a chat with journalists.
Ogungbesan said the incentive, which might come in the form of one per cent bonus, would not only help to encourage compliance with tax laws, but would also improve tax revenue to the government.
He said while the service was considering rewarding taxpayers, those that were in the habit of evading taxes would first be enlightened on the importance of paying up.
According to him, after the enlightenment, any firm or individual that fails to pay will face the full wrath of the law.
Ogungbesan said, “The duty of every Nigerian at the 1st of January is to go to the tax office and pick a form and assess himself. We are undergoing a self-assessment tax regime at the moment.
“There is a continuum we call compliance continuum. These are those who are complying and there are those at the extreme end who, no matter what action you take, no matter the intervention, no matter the encouragement, they still will not comply.
“And in-between, there is a hybrid – a mix. So, in between, we have to develop a strategy. So, for those who are complying, our posture is that we will continue to support them; we may even go to the point of giving them concession such as one per cent bonus for complying.
“They need to be recognised as examples for tax administration. For those who need help and are not able to comply because they don’t understand, we will support them with tax education and assistance in any form until we get to the extreme ones.
“It is the extreme ones who don’t cooperate or comply that we will bring force on. It will be the last resort.”
He also said the service would come up with fresh initiatives that would help to ensure transparency in tax administration.
Ogungbesan, who was appointed last Wednesday by President Goodluck Jonathan, said the drop in oil prices had made it imperative to come up with fresh initiatives that would help to generate more revenue for the government through taxes.
He said rather than closing businesses and taking tax evaders to court, the FIRS under him would begin an engagement process with all taxpayers to secure their buy-in.
This, according to him, is one of the viable ways to improve tax revenue for the country in the face of declining oil revenue.
He lamented that some of the initiatives, which the service had unveiled in the past, had not really achieved their maximum impact, noting that this had imposed a greater burden on the FIRS to come up with best ideas.
Some of the initiatives, which according to him, have not achieved the needed results are the Tax Identification Number System and the voluntary tax assessment system.
He said, “We need to let people understand where we are coming from because we have seen that some of these policy initiatives have not delivered on their expected benefits. We may keep saying revenue is increasing but there are still opportunities that have not been exploited yet.
“If this is so, why don’t we engage with stakeholders in some of these areas? These are very critical times when revenue had been dwindling, and non-oil revenue is not increasing at a rate commensurate with an economy that has just undergone rebasing.
“What I feel was lacking in the past was meaningful engagement because if I have problem of multiplicity of taxes – that is, some states are not doing what is not contained in the Taxes and Levies Act, it is because we are not engaging well enough with all those parties. So, we need to strengthen engagement.”
He called on the states that had yet to implement the TIN system to do so in order to enable the service to generate more revenue for the government.