BY MAYOWA SAMUEL
Tax defaulters who plan to institute legal cases against the Federal Inland Revenue Service now have to pay 50 per cent of the assessed amount in dispute into an interest-yielding account of the Federal High Court before the court can hear such matters.
This was disclosed by the Executive Chairman, FIRS, Muhammad Nami, on Friday during a public hearing organised by the House of Representatives Committee on Public Accounts investigating revenue leakages arising from tax waivers and incentives to foreign companies granted pioneer status.
Nami said the new rule is contained in a recent Practice Direction issued by the Chief Judge of the Federal High Court, Abuja, Justice John Terhemba Tsoho, under Order 57 rule 3 of the Federal High Court (Civil Procedure) Rules, 2019. He also confirmed that the Practice Direction took effect from 31 May 2021.
Nami added that the Management of FIRS “has initiated a process for a Memorandum of Understanding with critical stakeholders as far as information sharing and amendments to the relevant laws are concerned.”
“We have several amendments to our tax laws which require companies operating in the Free Trade Zones to file tax returns on their operations to the FIRS. These amendments are aimed at checking the activities of taxpayers currently taking advantage of some gaps in our tax laws and fiscal policy by establishing businesses in the nation’s tax-free zones,” he said.
He emphasised that “such companies produce goods that are meant for export and then sell the goods to our Customs’ zone thereby making it impossible for the companies operating in our Customs’ zone to operate competitively with them.”
Nami, who maintained that tax evasion and tax avoidance were global phenomena, also said that such practices were also fiscal policy issues.
He then urged the National Assembly to, as a second step, “amend the relevant tax laws that would make it almost impossible for these companies to exploit loopholes in our tax laws to shift both profits and taxes to their countries of origin.”
