House calls on FIRS to recover N5trn unpaid taxes

Nigeria’s House of Representatives, on Thursday, directed the Federal Inland Revenue Service (FIRS) to recover a staggering N5.19 trillion owed to the federal government in unpaid taxes.

This directive comes amidst concerns over dwindling government revenue and a widening budget deficit.

The motion, spearheaded by Oredo Federal Constituency representative Esosa Iyawe, specifically targets ministries, departments, and agencies (MDAs) of the government, oil companies, and individuals who have failed to fulfill their tax obligations. Iyawe raised serious concerns about the lax enforcement that has allowed such a significant amount to accumulate in unpaid taxes.

Iyawe’s motion was titled, “Alleged non-remittance and under-remittance of tax by ministries, departments, and agencies of government, oil companies, and other organisations.”

Moving the motion the Labour Party lawmaker recalled that in 2021, “the FIRS revealed that the sum of N17. 69bn was owed in taxes by some companies, whose addresses were untraced to date, but no action was taken to locate or recover the funds.

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“Audit reports from 2015 to 2019 revealed government agencies owing hundreds of billions in FIRS taxes, comprising underpayments and under-recoveries and over 5,000 companies and MDAs of the Federal Government owing N5.2tn in withholding taxes,” he said.

Iyawe further argued that under-remittance and non-remittance of tax deprived the Federal Government of the much-needed funds to drive its policies for national development, stressing that if the situation was not urgently addressed, the effect could be crippling on the country’s already dwindling economy.”

He maintained that small-scale businesses in Nigeria were frustrated by multiple taxations by the FIRS while “states and local government authorities, multinational companies and other corporate organisations are getting the kid-glove treatment.”

Following the adoption of the motion, the House urged the FIRS to embark on a tax recovery drive while also mandating the Committees on Public Accounts and Finance to investigate the non-compliance on tax remittance by MDAs of government, oil companies, and other organisations, “with a view to ensuring that all debts in taxes owed the Federal Government are duly recovered, and report back within four weeks for further legislative action.”

The House resolution reflects a growing frustration among lawmakers regarding the government’s financial situation. Nigeria faces a significant budget deficit, forcing it to rely heavily on borrowing to fund its programs. Recovering these unpaid taxes could provide a much-needed boost to government coffers, potentially reducing reliance on debt and freeing up resources for critical social and infrastructure projects.

However, the task of recouping such a vast sum won’t be easy. The FIRS will need to implement a robust strategy that combines efficient tax collection mechanisms with robust enforcement measures. This could involve stricter audits, improved data analysis to identify tax evaders, and potentially even legal action against recalcitrant defaulters.

The FIRS is yet to officially respond to the House directive. However, it’s expected that the agency will face increased scrutiny and pressure to deliver results in the coming months. The success of this tax recovery effort could have a significant impact on Nigeria’s economic future and its ability to achieve sustainable development goals.

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