FIRS
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The Federal Inland Revenue Service (FIRS) has introduced a new regulation requiring banks to report accounts with a quarterly turnover of ₦25 million to the tax agency. This move is aimed at increasing tax revenue and broadening the tax base in Nigeria. The FIRS has directed banks to provide information on such accounts, citing its power to request information under the Companies Income Tax Act (CITA) and the Value Added Tax (VAT) Act [1].
According to Taiwo Oyedele, the Chairman of the FIRS, the agency will issue a public notice soon to clarify the modalities for implementing this requirement. The notice will provide guidelines for banks on how to comply with the new regulation. This development is part of the government’s efforts to improve tax compliance and increase revenue.
The ₦25 million threshold is expected to capture a significant number of businesses and individuals with substantial financial transactions. The FIRS aims to use this data to identify taxpayers who have not been paying their fair share of taxes. This move is likely to affect many Nigerians, including small and medium-sized enterprises (SMEs) and high net worth individuals.
The FIRS has been increasing its efforts to improve tax compliance, including the introduction of the Taxpayer Identification Number (TIN) and the automation of tax processes. This new regulation is another step in the agency’s efforts to increase tax revenue and improve transparency.
The requirement for banks to report accounts with high turnover is not unique to Nigeria, as many countries have similar regulations in place. The FIRS is likely to use international best practices to implement this regulation and ensure that it is effective in increasing tax revenue.
The implementation of this regulation is expected to generate significant revenue for the government. The FIRS has warned that it will not hesitate to take action against taxpayers who fail to comply with the new regulation. The agency has urged taxpayers to take advantage of the Voluntary Assets and Income Declaration Scheme (VAIDS) to regularize their tax affairs [1].
