FIRS is contemplating motorcar tax law to extend income

The executive chairman of the Federal Tax Office (FIRS), Mohammed Nami, announced that the service is working on a bill to introduce road taxes for users.

Mr Nami said the bill will include the use of electronic means of collecting taxes from road users in order to increase revenue.

He announced the revelation when he appeared in Abuja on Wednesday at the interactive meeting on the Medium Term Expenditure Framework (MTEF) before the House of Representatives Finance Committee.

According to Mr. Nami, the agency will send the bill to the National Assembly for consideration and approval.

PREMIUM TIMES had reported that the Federal Executive Board (FEC) had approved the new road policy last week.

The directive aims to reintroduce toll booths on Nigerian roads.

Mr Nami said although the service is targeting N10 trillion for the entire association in fiscal 2022, the money will not be enough to repair all roads in Nigeria.

“The road tax is necessary because there is no way anywhere in the world to see people using the roads for free.

“Even if you can give the Federal Republic of Nigeria a whopping 10 trillion N10, it will not be able to repair the roads in Nigeria as it is today, just the roads in Nigeria alone.

“We have therefore decided to propose the introduction of road taxes to the federal government through our special tax administration department so that at any time at least 50 trucks that would drive on these roads free of charge at a toll station or probably at a place where we will use electronic devices to pick them up without necessarily building a toll booth.

“We understand that the owners of these trucks pay nothing to the government and do not receive an FIRS certificate. So up to 15 or 20 trucks driving the road that is being built with a personal income tax that I pay and you pay, and then they don’t pay any tax. We want to identify that. “

The FIRS boss also deplored the challenges of including the informal sector in the tax bracket.

He told lawmakers that the service was considering a “suspected tax” but had to drop it due to conflicts with existing laws.

“We tried at one time in the informal sector to propose what is known as an alleged tax to the National Assembly. But we’re faced with a bit of a challenge and haven’t tabled the proposal yet, simply because we’ve learned that there is a law by the National Assembly that said companies with sales of around N1 to N25 million.

“So if you already have that, you will find it difficult to say that you will come and pay the alleged tax. The alleged tax is a tax that we simply tell you based on your estimate of how much you’ve made that year and you say 12 million. Then let’s say you pay maybe six percent of that 12 million and you leave because you are not an organized sector. “

Considering the breakdown of the service’s revenue performance in 2021, he said the projected revenue is N6.40 trillion, which is equal to N 1.64 trillion (26%) and 4N. 76 trillion (74%) for oil or non-oil.

“The service reached N2.762 trillion as of June 30, 2021 (second quarter), which is 43% of the approved projected revenue collection. Non-oil revenues were N 2.118 trillion for the period compared to N 1.5 trillion earned during the corresponding period, an increase of 41.2%.

“While the oil revenue collected during the same period was N 644 billion compared to N 971 billion collected in the corresponding period, representing a 33.68% decrease in oil collection.”

Effects of the Mineral Oil Industry Act on sales

He also announced that the Petroleum Industry Bill (PIB), recently approved, could affect the sales forecast in 2022, noting that the implementation of the law could pose some challenges for the service.

“We assume that the new Petroleum Industry Act will lead to a number of votes that could affect the forecasts for 2022. We expect new issues to be carried over to the new regime. So we’re trying to make sure we adjust these expenses for 2022.

“We know this will affect our ability to generate more revenue in this area. There are currently some certificates that they could use, but they will use them as this will be a new regulation. It will no longer be the one with an investment tax allowance. It will be based on actual performance. “

President Muhammadu Buhari set up the PIA Steering Committee on Wednesday, chaired by Minister of State for Petroleum Resources, Tmipriye Sylva.

The committee has the mandate to implement the law within 12 months.

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