The Federal Inland Revenue Service (FIRS) has announced the introduction of a centralized payment system designed to simplify tax remittance for all 36 states in Nigeria. This initiative was highlighted by FIRS Executive Chairman, Dr. Zacch Adedeji, during a workshop aimed at enhancing tax compliance and revenue generation for state accountant generals held in Abuja on Thursday.
Dr. Adedeji explained that the federal government is committed to making the tax remittance process more efficient. With the new system, accountant generals will manage payments on behalf of government agencies, facilitating faster and more accurate remittance of various taxes, including Value Added Tax (VAT), Withholding Tax (WHT), and Stamp Duties.
“The federal government has made efforts to simplify the tax remittance process, particularly through the centralized payment system. This has been instrumental in ensuring swift remittance of taxes,” Adedeji stated. He also mentioned that the FIRS has reduced WHT rates to focus on taxing profits rather than revenue, a strategic move aimed at alleviating the financial burden on both businesses and citizens.
While acknowledging that these changes may result in a temporary decrease in immediate tax collections, Dr. Adedeji expressed optimism that enhanced compliance and collaboration with state authorities will ultimately expand the tax base and compensate for the shortfall. “We believe that with enhanced compliance, we can make up the difference,” he affirmed.
The responsibility of ensuring proper tax collection lies significantly with accountant generals, who are tasked with making sure that VAT is charged and remitted appropriately, Stamp Duties are paid on contracts, and WHT elements in contracts are correctly withheld and remitted.
This initiative by the FIRS is expected to not only streamline the tax remittance process but also encourage greater compliance among businesses, contributing to improved revenue generation for both state and federal governments.
