FIRS Priorities Taxation of Digital Economy

The Federal Inland Revenue Service (FIRS) will make the taxation of the digital economy its priority, this year.

Johannes Wojuola, the Special Assistant to the Executive Chairman (Media & Communication) yesterday, quoted the Executive Chairman of the FIRS, Mr. Muhammad Nami, as saying that the Service would take full advantage of the, previously untaxed, digital economy to boost revenue collection.

According to him, “the FIRS will deploy technological tools in assessing entities that fall within the Significant Economic Presence (SEP) threshold and relevant turnover generated from Nigeria.

“With the amendment of Section 10 of the VAT Act by the Finance Act 2021, we will implement the published Guidelines on the Simplified Compliance Regime on VAT for Non-Resident Suppliers, to collect VAT on digital supply of services and intangibles to Nigeria.

“The Service has deployed a digital service interface, the Digital Economic Compliance (DEC) Tool, to facilitate the implementation of the regime.

“The implementation of the DEC Tools will also assist the Service in determining entities that fall within the SEP threshold and relevant turnover generated from Nigeria. This tool will go live shortly.”

The Chairman warned that any person or organization that refused FIRS access to its information technology system would be penalized.

His words, “We will seek to achieve 100% automation of all our tax administration processes, which will block revenue leakages and revolutionize revenue generation.

“In line with the amendment to Section 25 of the Federal Inland Revenue Service (Establishment) Act in the 2021 Finance Act (through Section 18 of the 2021 Finance Act), any person who fails to grant the Service access to its information technology systems to connect to its automated tax administration solution is liable to penalties under the law.”

Mr. Nami noted that in the year 2021, the Service had leveraged on the amendments to its Establishment Act to embark on “a major infrastructure overhaul, focusing on the deployment of technology for the automation of its processes and procedures,” thereby deploying its home-grown integrated tax administration system, TaxPro Max.

He added that the Service “will focus on compliance and enforcement strategies in 2022, by leveraging on intelligence, strategic data mining and analysis, to enhance audit and investigation functions and implementing the penalty regimes in accordance with extant laws;”

The FIRS boss urged taxpayers, tax consultants, tax collection agents and other stakeholders in the tax system to partner with the FIRS in 2022 to make taxation and tax revenue collection a pivot for economic growth and national development.