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FIRS to cancel pioneer certificates issue to undeserving firms

By on August 21, 2020 0 214 Views

The Federal Inland Revenue Service (FIRS is investigating the process of granting the certificate of pioneer status to some companies in the country as part of measures to review and plug tax leakages.
Muhammad Nami, chairman of FIRS said the service is currently auditing the scheme with a view to pressing for the cancellation of pioneer certificates issued to undeserving companies in violation of the law.
According to him, the service will withdrawal the certificate of pioneer status to some entity to reduce the systemic abuse of the pioneer incentive scheme instituted by the government to boost industrialization in the country.
Muhammad Nami, chairman of FIRS said the abuse of the scheme has resulted in tax revenue leakages for the three tiers of government.
Nami, who spoke while receiving some state commissioners of finance in his office said the service will move to plug the inherent gaps in order to generate more revenue for the government.

According to him, the pioneer status otherwise granted outside the law would not enjoy tax relief regardless of the certificate issued to them.
He advised that owners of such certificates were requested to regularise their tax positions or risk sanctions in accordance with the law.

Also, the Coordinating Director, Tax Operations Group, FIRS, Femi Oluwaniyi, lamented the indiscriminate tax waivers and incentives granted to undeserving companies, saying that this had impacted negatively on revenue generation.
He said the service had discovered that pioneer status certificates had been issued to companies that were not pioneers on their fields in the real sense, hence undeserving of such status.

Nami however stated that tax revenue accounted for nearly 70 percent of what was shared at the last FAAC meeting and lauded the collaboration between the service and the state commissioners of finance, adding that this was key to bringing about increase in tax revenue.
He said without the collaboration, it would be difficult for government to meet its obligations to the citizenry in such areas as infrastructure development and salary payment, which could lead to social dislocation.

He also stressed the need to diversify the economy in order to create more sources of taxable income and increase tax revenue for the country.
He charged the states to focus on other forms of taxes including the stamp duty which he described as the “black gold” which had been ignored before now.

He also charged all ministries, departments and agencies (MDAs) of government to deduct withholding tax from contracts at the point of payment.

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