Tax: LIRS, FIRS Sign MoU on Joint Tax Audit System|Omohglobalnews

Tax: LIRS, FIRS sign MoU on Joint Tax Audit system

MoU will pave the way for a joint tax audit system that will facilitate the exchange of data.

The Lagos State Internal Revenue Service (LIRS)  signed a Memorandum of Understanding (MoU) with the Federal Inland Revenue Service (FIRS) to establish a joint tax audit system that will address duplication of efforts and facilitate the exchange of data.

This was disclosed by Lagos state Governor, Babajide Sanwo-Olu after the signing ceremony on Monday in Lagos. The Executive Chairman, LIRS, Mr Ayodele Subair signed on behalf of Lagos State; his counterpart, Mr Muhammad Nami, Executive Chairman, FIRS, signed on behalf of the Federal Government.

The Lagos Governor added that MoU is in the best interest of the public, as it strengthens the cordial working relationship between the two agencies.

Joint tax audit: Sanwo-Olu revealed that the MoU will pave the way for a joint tax audit system that will facilitate the exchange of data that is relevant to the enforcement of extant tax laws, he said:

“I witnessed the signing of a Memorandum of Understanding between the Lagos Internal Revenue Service and Federal Inland Revenue Service. LIRS and FIRS have established a joint tax audit system that will address duplication of efforts and facilitate the exchange of data that is relevant to the enforcement of extant tax laws.

“Minister of State for Finance, Mr Clem Agba, also witnessed the agreement signing ceremony that also had senior officials of our administration in attendance.”

Planned Collaboration: The Governor said Lagos state is humbled by this collaborative effort and believes the citizens will be the ultimate beneficiaries of this initiative, adding that the MoU is in the best interest of the public, as it strengthens the cordial working relationship between the two agencies.

“For us as a state, we are humbled by this collaborative effort and we believe our citizens will be the ultimate beneficiaries of this initiative.

“This collaboration did not just happen by chance; it is a conversation we started about a year ago with the chairman of FIRS when both parties reviewed their successes and limitations and it was clear there was a need for a relationship to be consummated.

“Studies have shown that there would be better service delivery to the citizens and improvement in the efficiency of tax collection when the two agencies work together.

“The cost of tax collection would be reduced, we would see better customer satisfaction and more resources would be generated for the Government to deliver more dividends of democracy.

“The MoU is in the best interest of the public, as it affirms the reason why we need to come together and strengthen the cordial working relationship between the two agencies.”

Sanwo-Olu urged that Nigeria must operate at the same level as other nations within sub-Saharan Africa doing between 14 and 15 per cent in tax to GDP ratio to support the government’s development programmes and improve accountability.

Muhammad Nami, the FIRS Chairman, said the collaboration between the FIRS and LIRS will enable them to work together as a team during the investigation and have an automatic exchange of information and carry out mandates seamlessly.

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Nigeria’s Federal Inland Revenue Service (FIRS) announced the highest tax revenue in its history, collecting N10.1 trillion in tax revenues in 2022.

A statement seen by Nairametrics said the FIRS earned N4.09 trillion in oil revenues (41%) and N5.96 trillion in non-oil revenues (59%). This is against a target of N10.44 trillion set for the year.

“Companies Income Tax contributed N2.83 trillion, Value Added Tax N2.51 trillion, Electronic Money Transfer Levy N125.65 billion and Earmarked Taxes N353.69. Non-Oil taxes contributed 59% of the total collection in the year, while oil tax collection stood at 41% of the total collection,” the statement explained.