Buhari says foreign companies will no longer be allowed to operate without paying taxes

President Muhammadu Buhari on Thursday directed the Federal Inland Revenue Services (FIRS) and related government agencies to enforce strict compliance of tax payments by foreign companies operating in Nigeria.

Buhari announced this in a virtual address at the

First National Tax Dialogue held at the State House in Abuja where he said foreign agencies would no longer be allowed to do business in the country without paying appropriate taxes.

He explained that “the administration is, however, not seeking to increase the tax burden upon citizens but to plug the existing tax loopholes or leakages and to ensure even and equitable application of the tax laws.”

The president said: “It is not enough that our citizens and local businesses pay their fair share of taxes. Equally, foreign businesses must also not be allowed to continue to exploit our markets and economy without paying appropriate taxes,”

“Accordingly, the FIRS has my mandate to speedily put all measures in place to fully implement programmes to stamp out Base Erosion and Profit Shifting in all their ramifications and generally automate its tax processes.

“In line with this, I have directed all government agencies and business enterprises to grant FIRS access to their systems for seamless connection. FIRS must ensure that its deployment of technology for automation is done in line with international best practices. In particular, FIRS can borrow a leaf from other countries which have successfully automated their tax processes.”

Buhari also said the country will improve its inclusive framework and develop internationally acceptable rules for taxation.

“The Inclusive Framework would have evolved into an acceptable multilateral solution that will comprehensively address the tax challenges of the digitalised economy by the middle of 2021.”

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Speaking about the economy, the president said: “The devastating effect of COVID-19 on the health and economy of the world is evident across every strata of our society. It is obvious to every citizen of this country that our economy is not immune from the global economic downturn. As such, we have had to confront the conflicting situations of reflating the economy and at the same time raising revenue to meet our budgetary needs. It is within this context that the government undertook an expansive budgetary projection of over N13 trillion for 2021.

“inevitably resorted to deficit budgeting as a result of declining revenues for some years” resulting to increase in Nigeria’s debt profile.

“As we might expect, this has led to increase in Nigeria’s debt profile which stood at about N32 trillion in September 2020. This funding gap created by the dwindling government revenue therefore underscores the importance of the national tax dialogue we are holding today.

“No nation has ever made progress without having to pay for it or make the necessary sacrifice. I therefore call on all Nigerians to be alive to their tax obligations. This government is strategically restructuring the tax revenue mix in favour of indirect taxes in accordance with our national tax policy document. To this end, FIRS is mandated to do all that is required in order to efficiently collect tax revenue due from transactions carried out using local and foreign online platforms. The government has made relevant statutory amendments to tax laws in the Finance Act 2020.”

He also revealed that the FIRS Establishment Act in the Finance Act 2020 has been amended to provide a legislative framework for the adoption of technology In tax administration

“Every Nigerian must see tax payment in its proper context, which is, as a solemn and patriotic obligation that is necessary for building a better society”, he added.

FIRS chairman, Muhammad Nami, called for a new, comprehensive tax payment culture in the country.

.Buhari says foreign companies will no longer be allowed to operate without paying taxes. . | ..

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