• Govt to rely on taxation for funds
The biggest challenge that the Federal Inland Revenue Service (FIRS) is currently grappling with is funding of the 2016 budget and subsequent ones.
Its chairman, Tunde Fowler who spoke in Abuja yesterday while responding to questions from reporters after the opening ceremony of the meeting on “Transfer Pricing in the Economic Community of West African States (ECOWAS), said the Federal Government has had a recourse to funding its budgets from taxation by ensuring that all corporations operating and making profit within the country pay the appropriate tax when due.
The forum had: Protecting the Tax Base and Building a Strong Investment Climate Across the Regionas its theme.
Fowler urged all citizens whether in the state or local government to pay their right tax and levy, and assured that the FIRS would ensure optimal expenditure of the fund.
He said: “The biggest challenge for FIRS this year is to fund our current and future budgets. But at the same time, being the largest economy, some people might say the second after the evaluation of the exchange rate .
“However, we have to rely on taxation to fund our budget and subsequent budgets; and we have to ensure that all organisations operating within Nigeria, making profit within Nigeria pay the taxes that are due to Nigeria.
“I think it is a collective drive. All of us in Nigeria, whether you are paying federal tax or state tax or local government levy, we just have to pay the right amount of taxes while we as administrators we do the best we can do with it.”
Explaining the topic “transfer pricing”, Fowler said it meant to make profit in one location and declare it in another place where there is lower tax rate to deny the country where the income was generated the accruable tax benefits.
He said:”What they are talking about is transfer pricing, because when profits are made in one location but declared in another location usually where the tax rate is lower.
“So, let’s give a simple example. You might have companies- multi-nationals operating in Nigeria and declaring the profit in another country where the tax rate is lower. So, where the income is made or the interest is generated from does not benefit from the taxation.”
The FIRS chairman said the challenges of price transfer has caused Organisation for Economic Cooperation and Development (OECD) $250 billion loss of taxation of which the West African sub-African region lost about $9million in the circumstance.
He said: “It is a problem all over the world. Like I said earlier the OECD last year gave a figure of $250 billion loss in taxation. One of the speakers from ECOWAS (Economic Community of West African States) said within the West African sub-region, we are looking at between $3million and $9million. If you convert that, you can imagine what it can do for any African country.
“This forum has two focuses. One is to improve the level of tax administration, to exchange ideas and ensure hat the tax administration within the sub-region have to do with these issues. We have treaties whereby you will not be taxed in two different countries. This has nothing to do with double taxation. “SHARE YOUR STORY WITH US VIA EMAIL: INFO@247NIGERIANEWSUPDATE.CO RECEIVE NEWS VIA OUR WHATSAPP, KINDLY TEXT +234 701 056 0394 TO ADD YOU CLICK HERE TO JOIN US ON OUR YOUTUBE CHANNEL FOR NEWS UPDATE CLICK HERE TO JOIN US ON TWITTER FOR INSTANT NEWS UPDATE: @247NGNEWSUPDATE CLICK HERE TO JOIN MILLIONS AROUND THE GLOBE TO READ NEWS ON OUR FACEBOOK FAN PAGE FOR INSTANT UPDATES ON INSTAGRAM CLICK HERE RECEIVE INSTANT NEWS UPDATE VIA OUR BBM BROADCAST: D3EDEFDF PLACE YOUR TEXT ADVERT BELOW:>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>