FIRS chairman directs ‘door-to-door’ compliance checks as VAT collection slides

Babatunde Fowler, Executive Chairman, FIRS

FIRS chairman directs ‘door-to-door’ compliance checks as VAT collection slides

Businesses across Nigeria, ranging from big corporations to fast food joints and kiosks, will soon play hosts to officers of the Federal Inland Revenue Service (FIRS) who will check their compliance with the Value Added Tax (VAT) laws.

The FIRS Executive Chairman, Tunde Fowler has directed stricter checks on businesses’ compliance with payment of 5% VAT following slowing growth in VAT revenue collection between February to May 2018.

The FIRS feared that if the lag in VAT revenue collection trend is not checked, it may affect the overall revenue collection projection of N6.7trillion since the Service is aiming to collect N1.54 trillion from VAT alone.

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The revenue authority has ordered that any business which fails to produce evidence of VAT registration and payment should be labelled with FIRS non-compliance sticker. This will be followed by enforcement and ultimately facing the law of tax evasion.  

A Lagos-based taxman, Tuesday in Lagos exclusively released a document signed by FIRS Coordinating Director, Domestic Taxes Group, Abiodun M. Aina on behalf of Fowler to our correspondent and said that concerned officers have received instructions to enforce the order finitely.

According to the document, new teams of FIRS officers have been directed to comb businesses door-to-door, demanding evidence of VAT registration and VAT payment from businesses owners.

“Management has continued to observe with utter dismay the poor performance of VAT collection in spite of intelligence and statistics indicating that there is a huge potential for greater achievement of this tax in the nation. In 2017, only 54% of the target for VAT was attained while in 2018, the amount of VAT has continued to slide month after month after an impressive collection of 80% in January only. If this trend is allowed to continue, we will never meet our target of N1.54 trillion for VAT nor the overall collection target of N6.7trillion for 2018”, the document said.

 To remedy the situation, it said: “VAT Coordinator, State Coordinators, RMUs (Relationship Management Units) and Tax Controllers are to immediately constitute teams of three or four officers and comb businesses… examples: Restaurants, Hotels, Night Clubs and Lounges, Supermarkets, Beauty parlours, Tailoring Outfits and Boutiques, Event cetres, Photo studios, Gardens, Ice-Cream bars, Pharmacies, Consultancies and Professional outfits eg: Law Firms, Architectural firms, florists, fast food and Kiosks”.

The officers are to be assigned locations within towns across Nigeria and each team is to comb assigned locations door to door and demand evidence of VAT registration and VAT payments from business owners.

“Any business that fails to produce the above information should be marked non-complaint and non-compliance stickers be placed immediately on the premises of such premises with picture evidence”, it added.

The FIRS also directed its officers to use the campaign opportunity to distribute taxpayer educational materials to enlighten the taxpayers on their roles and responsibilities as good citizens.