The FIRS and the Authority of the Tax Administration

The powers, functions, responsibilities, and mission of the Federal Inland Income Service (FIRS) to administer tax laws for the purpose of generating revenue for the federal government have been the subject of conflict, disagreement, miscommunication, and general ignorance throughout the years.

This has led to many judicial and administrative disputes, which, among other things, sometimes prevent the government from receiving taxes that are due and, at other times, assist to resolve over- and under-remittance.

The goals of FIRS are to oversee and administer the various taxes and laws listed in the first schedule, as well as any other laws that have been or will be made in the future by the National Assembly and any related regulations made by the government of the federation, and to keep track of all taxes collected.

Relationship between FIRS and the Ministry of Finance

The Ministry of Finance has historically been responsible for the tasks related to tax collecting. At the moment, the tax administration organization for Nigeria, known as FIRS, has an autonomous status and is responsible for managing taxes for the government. The Nigerian President appoints the chief executive of FIRS.

According to the theory, FIRS needs to be autonomous in order to carry out its duties because of factors such as its extensive office network (150 tax offices nationwide), its expertise in tax assessment and collection, its need for efficient and effective management and administration, and its need to be free from political interference in day-to-day operations, among others.

mandate for FIRS tax administration

Registration, assessment, returns, collection, compliance monitoring and enforcement, taxpayer education and awareness, and other initiatives to increase the efficacy and efficiency of taxes are all part of FIRS’s tax administration process.

The Federal Inland Revenue Service will be established and given the authority to assess, collect, and account for all revenues due to the Government of the Federation, among other things, under the terms of the FIRS (establishment) Act of 2007.

Mandatory tax administration:

The revenue watchdog’s responsibilities include registering taxable individuals, assessing taxes, collecting them, and enforcing compliance. The consequence is that taxpayers must provide accurate information when requested by the appropriate tax authorities. Beyond people, the federal government has given the FIRS the authority to register corporate taxpayers and businesses for local taxation.

The State Boards of Internal Revenue are in charge of registering people who are either employed or who are operating their own small companies under a partnership or company name. To be able to pay taxes, every taxable individual in both jurisdictions must register and get a special number called a Taxpayer Identification Number (TIN), which is valid throughout the country.

During this stage of the tax process, FIRS makes use of the database integration with the Central Bank of Nigeria on the Bank Verification Number (BVN), National Identity Management Commission (NIMC), Nigeria Communication Commission (NCC), Corporate Affairs Commission (CAC), Federal Road Safety Commission (FRSC), and Nigeria Immigration Service (NIS), respectively.

Request returns, books, papers, and information by phone.

The service shall give notice to any individual, company, or person, and require such individual, company, or person, within the time specified by the notice, to call for further returns and payment of tax due. This is done in order to obtain complete information regarding the taxation of a “individual, company, or any person” or for the purpose of performing any function conferred on it by the enabling Act of 2007.

The legislation advises the service to send written notice to anybody it deems necessary, requesting that person to submit further returns in relation to any subject relevant to the activities of the Service under this Act, within a reasonable period indicated in such notice.

If tax debt is not paid, the defaulting party will additionally be responsible for paying a penalty that is equivalent to the whole amount of tax that is due and payable.

access to lands, structures, publications, and documentation

Additionally, the FIRS establishment Act permits a Service officer to

have unrestricted access to all lands, buildings, locations, books, and documents that are in a public official’s custody or under their control at all times, including those that are stored or maintained on computers or on digital, magnetic, optical, or electronic media, as well as any process or item that the official deems necessary or relevant for the purpose of collecting any tax under any law.

The Service shall immediately take possession of such removable media and the related removable equipment or computer used to access the store documents on the media in order to prevent the accidental or deliberate destruction, removal, or alteration of records and documents when the hard copies of any of the books or documents mentioned in the above are not immediately available because they are stored on a computer or on digital, magnetic, optical, or electronic media.

the ability to eject books and papers

Books or documents accessible under section 29 of the FIRS Establishment Act may be removed by an official of the Service with permission from the Executive Chairman in order to make copies.

Any copies that need to be made of the books or papers that were taken must be done right away.

The Executive Chairman’s certification of a copy of a book, document, or piece of digital evidence makes it acceptable in court as if it were the original.

The owner of a book or document that is removed in accordance with this section is entitled to inspect the book or document and obtain a copy of it at the location to which the book or document is moved, at the owner’s expense, both at the time the book or document is moved to the location and (b) at reasonable intervals after that.

Ability to substitute

In the event that the conditions outlined in this section’s sub-section (2) make it necessary, the Service may, by written notice, appoint any person to serve as the agent of a taxable person.

Any money that the agent of the taxable person may have may be used to force the agent designated according to paragraph (1) of this section to pay any taxes due by the taxable person.

The tax must be recovered from the agent mentioned in this section’s subsection (2) when he defaults.

For the purposes of this section, the Service may ask anyone for information regarding any funds, money, or other assets that they may be holding for someone else or that they owe them.

Getting back taxes

Not many individuals are aware that any tax obligation should be considered a debt to the service and that the service may pursue recovery via a civil lawsuit.

The FIRS Act states that when a tax has been under-assessed or incorrectly repaid, the person who should have paid the under-assessed amount or to whom the repayment has been made incorrectly shall, upon demand by the proper officer, pay the under-assessed amount or the incorrectly repaid amount, as the case may be. Any such amount may be recovered as if it were tax to which a person to whom the amount was so under-assessed or errone

Tax-related inquiries

The service is required to use special purpose tax officers to assist any relevant law enforcement agency in the investigation of any detected violations of this Act.

Whether or not a tax law infraction has been reported to the service, the agency has the authority to launch an investigation or to order one to be done.

the exercise of authority

In order to carry out its duties, FIRS is permitted to enlist the aid and cooperation of any law enforcement organization.

By that intervention, the law enforcement officers are expected to support and aid an authorized officer in the execution of any warrant of restraint and the imposition of restraint.

freedom from punishment

A tax collector is not responsible for whatever he does or says while acting in his official capacity, either in a civil or criminal case.

Confidential information and documents

Taxpayer information shall be confidential, without limiting the provisions of any other Act relating to data privacy, data protection, and unauthorized disclosure of taxpayer information.

Any member or former member of the Board, employee or former employee of the Service, agent or any other person who communicates or attempts to communicate taxpayer information to any person other than to a person legally authorised to collect the tax or misuses the information, commits an offense, unless otherwise provided by the FIRS establishment Act, any other law, any enabling agreement or arrangement, or as otherwise authorized by the Minister.