The Academic Staff Union of Universities (ASUU), Northern politicians, and other stakeholders have expressed disagreement with the Tax Reform Bill.
The assertion that the bill suggested consultants collect taxes for the government was one of the points of disagreement.
The majority of the bill’s detractors cited Section 69. In a statement, Oyedele clarified that the portion was misunderstood by critics.
This note provides the facts on the allegation that several tax reform bill provisions aim to implement tax collection by consultants or third parties, continuing our explainer series and providing clarifications on issues pertaining to the bills.
“There is no provision in the tax bills seeking to introduce consultants for tax collection. In fact, section 19(3) of the Nigeria Revenue Service (Establishment) Bill specifically prohibits the engagement of consultants for the assessment or collection of taxes on behalf of the tax authority. The section empowers the Revenue Service to appoint and employ consultants, accountants, other professionals or agents where necessary for the performance of its duties provided that such consultants shall not carry out the duties of assessment or collection of tax, tax compliance or enforcement activities, or routine responsibilities of tax officials,” he said.
Oyedele explained that section 69 which states that a relevant tax authority may deploy any technology, including a third-party payment processing platform or computer application to collect or remit taxes was not a new addition.
“This is not a new introduction. The provision currently exists under section 25 of the FIRS Establishment Act 2007 as amended by the Finance Act of 2021.
“The tax bills only retain the provision to empower the tax authorities to seamlessly automate tax administration and link up with taxpayers for ease of tax compliance.
“The necessary applications and payment solutions may be developed by the relevant tax authority or procured from third parties.
“In theory, this is no different from how public or private sector organizations, like banks and online retailers, use third party applications for payments, and it is a common practice for tax administration worldwide,” he said.
He underlined that the measure has clauses designed to prevent transparency from being jeopardized by tax authorities’ participation with third parties.
The Nigeria Revenue Service (Establishment) Bill’s First Schedule lays out a governance framework for the tax authority’s operations, including safeguards against conflicts of interest.
Additionally, section 26 mandates that the tax authority provide the finance minister with a report on its operations on a regular basis, including audited financial statements. In turn, the minister is required to present the report to the Federal Executive Council and the National Assembly,” Oyedele added.
