The Executive Chairman, Federal Inland Revenue Service (FIRS), Muhammad Nami has revealed that, 28,000 companies filed their Value Added Tax (VAT) returns to the Service (FIRS) in July 2023 alone.
According to him, the development was the result of deployment and utilisation of new technology driven platforms which ease tax payments procedures.
Nami said, the significant thing is that with the pressing of a button, a lot of statistics about tax processes including VAT and other taxes can be accessed and ascertained.
The FIRS Executive Chairman noted that, the figure represents an improvement on previous figures filed monthly and expected to increase in subsequent months.
He I formed that, as part of the deliberate design of the Federal Government to encourage the growth of small and medium enterprises, the FIRS came up with a law in 2019 that exempted companies with an annual turnover of N25 million and below from paying VAT.
He said, “The intention was that since VAT is a progressive tax, it is imperative to give the smaller companies an opportunity to grow before requiring them to pay VAT”.
Nami attributed the successes recorded in the accelerated filing process and increased revenue generation to the technology and automation introduced by the FIRS, especially the TaxPro Max platform which enables faster registration, filing and payment of taxes.
According to him, the TaxPro Max portal can be accessed by taxpayers from anywhere including the comfort of their homes and offices.
He said it has functionalities for faster Registration, Filing, Assessment, Payment, Issuance of Tax Clearance Certificate and receipts for resident and non-resident taxpayers.
It could be recalled that, the FIRS introduced its naira-denominated tax administration system, TaxPro Max In June 2021, as an online platform to ease tax compliance and modernise tax administration in the country.
The platform is in compliance with the provisions of the Finance Act 2020 which empowers the Service to automate tax return filing and payment processes.
As expected, the TaxPro Max system turned out to be a game-changer right from the very first year of its deployment, by contributing to the FIRS’ ability to successively surpass its yearly targets in revenue collections in 2021, 2022 and the first half of 2023 already.
Nami stated, “We decided to automate the process when I came in and to automate the process we need in-house technology. We assembled a team of young men and women who are interested in serving Nigeria, who are knowledgeable in ICT in particular software development and they came up with that technology called TaxPro Max”.
VAT is a tax payable on the goods and services consumed by an individual or organisation. It is paid by individuals, private or business organisations, government departments and agencies.
The target of VAT is consumption of goods and services and unless an item is specifically exempted by law, the consumer is liable to the tax.
Businesses and organisations are required to register with the FIRS before they can collect the VAT tax on behalf of the Government. They are required to file monthly tax returns to the Government through the FIRS.
Nami further explained that the 28,000 filing recorded in July excluded those by companies and organisations dealing on basic food items, baby products, books and educational materials, newspapers and magazines, medical and pharmaceutical products plus services among others which are exempts from VAT payment.
According to him, the figure also represents the filings by companies that recorded the threshold of N25 turnover and above during the month adding that companies with annual turnover less than the threshold figures are not required to pay VAT.
Companies that produce basic products such as food and pharmaceutical products are also exempted. Such companies are only required to file and notify the FIRS about their companies’ performance in other aspects.
He noted that, there are also other companies that are enjoying tax holidays granted by appropriate authorities.
