The Federal Inland Revenue Service (FIRS), has signed a Memorandum of Understanding (MoU) with the Lagos Internal Revenue Service (LIRS) on joint tax audits, investigations and automatic information exchange.
This was contained in a statement issued on Tuesday in Abuja by Mr. Johannes Wojuola, the Special Assistant on Media and Communications to the Executive Chairman of FIRS, Mr. Muhammad Nami.
Wojuola said the MoU was signed in Lagos by the Executive Chairman of FIRS and the Executive Chairman, LIRS, Mr. Ayodele Subair.
He said the event was witnessed by the Minister of State, Budget and National Planning, Prince Clem Agba and Governor Babajide Sanwo-Olu of Lagos.
Nami said the cooperation will allow the two authorities to work as a team to share relevant information that will help both parties in their tax administration and enforcement roles.
He said it would also provide capacity building among tax authorities.
“We will conduct joint audits and investigations as a team, we will also conduct automatic information exchange to collect data for tax administration purposes.
“With this information, we will be able to carry out tax administration smoothly.
“Besides this, what we want to say administratively because of our joint operation is to ensure that we can implement the presumptive tax regime in terms of tax administration.
“But that will happen after we finish with the regulations that we put together with the Ministry of Finance, Budget and National Planning, which the Minister of Finance will publish at the expected time,” he said.
Nami said the presumptive tax would be for the purpose of the administration of Personal Income Tax and Land Rent in Lagos State.
“Another key issue I am concerned with is capacity building.
“There are some things that we as FIRS know and want to share with the Internal Revenue Service. And there are also areas of specialization that we hope you can share with us through capacity building.
“The main objective of this collaboration is to raise sufficient funds for the Lagos State government and the Federal Government to finance their budgetary requirements,” the FIRS boss said.
While asserting that people can create civilization through the taxes they pay, Nami said the government cannot provide critical infrastructure if people do not pay taxes.
According to him, global civilization does not happen by accident, but people or citizens of different jurisdictions, states and countries globally make it happen through the taxes they pay.
“Without the funds received from governments through taxes, governments around the world would not be able to provide critical infrastructure such as roads, hospitals, international airports, and schools and maintain the safety and security of their citizens.
“With this collaboration, we are confident that Lagos State will get more revenue from taxes and be able to deliver the 4th Land Bridge, Lekki International Airport, which has been conceived and other critical infrastructure,” he said.
Nami appealed to the Lagos State government to continue to give citizens, especially tax payers for the taxes they pay.
Sanwo-Olu in his speech said that the collaboration started before 2022 with the aim of increasing the country’s fiscal space.
He said the country’s tax to Gross Domestic Product (GDP) ratio, around six to eight percent, was unsatisfactory and unacceptable.
According to him, the citizens of the Sub-Saharan region are better off.
“Other countries even in the Sub-Saharan region do between 14 and 15 percent.
“If you talk about developed countries, they do 35 to 40 percent and that’s what makes a developed country.
“This is really a way for you to support the government and be accountable,” he said
Sanwo-Olu said that with the collaboration, Lagos State is on track to rise above N1.7 trillion in the region of four to five trillion Naira.
The Minister of State, Budget and National Planning, Agba commended the two tax authorities for the agreement and called on other states to emulate him.