The Federal Inland Revenue Service (FIRS) would soon be implementing a Presumptive Tax Regime to get more Nigerians, especially those in the informal sector, to pay tax

Acting Executive Chairman, FIRS, Alhaji Kabir Mashi made the declaration in Abuja at a stakeholder’s sensitisation workshop.

He said that the idea of the regime was to help the informal sector to keep their books and records and to enable them to understand the tax system and how to use it to improve their business.

He said no amount had been fixed as possible tax under the regime, but noted that more money would be collected for the government in the process stressing that  “it is our belief that if we are able to implement a workable presumptive tax regime, it will create improved and easy access to tax system for the large pool of taxpayers in the informal sector.

He said this will enable us to not only grow that tax base across the three tiers of government, but more importantly, improve tax collection from non-oil tax revenue stressing that if we are able to do this successfully, we will be contributing to the overall development of the Nigerian tax system and the Nigerian economy.’’

Mashi said the FIRS had examined the experiences of other countries and tried to tailor collectable tax from the informal sector to be in consonance with Nigeria’s peculiarities.

“This is necessary because of our peculiar situation, where we have three taxing levels – the federal, the state and local government, whereas most of our tax laws are federal laws, but administered across the three tiers of government.

“In addition to this, we have a large pool of taxpayers and potential taxpayers in the informal sector in Nigeria who can contribute significantly to tax collection if they are properly assisted to comply with the laws,’’ he added.

He said that it was necessary to ensure that the compliance was attractive to encourage each taxpayer to participate and to be treated fairly.

He urged participants to seize the opportunity of their attendance at the workshop to make useful contribution to enable the FIRS to evolve the most appropriate way of administering a presumptive tax regime in Nigeria and also to harness its benefits.

FIRS Coordinating Director, Standards and Compliance Group Mr. Andy Ejemeyovwi, in his contribution, said that the initiative was critical to the development of tax system in the country.

He noted that evasion had remained an issue in Nigeria’s tax system, adding that there was the need to tackle it for the growth of the economy.

“In order to find a lasting solution to this teething problem of taxation in Nigeria, FIRS management has considered the various submissions of the Presumptive Tax Regime and approved the hosting of this sensitisation workshop in order to expose the thinking of the relevant authorities in the administration of Presumptive Tax Regime in Nigeria.

“How best can we handle the various problems limiting the smooth administration of presumptive tax in the informal sector as well as help effective traders to maintain some records of transactions generated and assist them to know whether they are running at a loss or making profit?

“This is on the way to getting them appropriately taxed.’’

He said Ejemeyovwi said that the initiative had worked very well in most West African countries and expressed the hope that it would be implemented effectively in Nigeria.

He urged tax administrators to make adequate contribution that would help to adopt best policies that would aid the smooth implementation of the regime in the country.

Also, Chairman Plateau State Board of Internal Revenue, Mrs. Rauta Jat, said that states’ tax administrators had problems with accessing the informal sector.

She said that the idea of the Presumptive Tax regime was an idea in the right direction as the states would benefit more from it.

“We are happy that the FIRS and the Joint Tax Board have decided to address this issue speedily.