NECA Faults FIRS’ Call For Advance Tax Payment

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The Nigeria Employers’ Consultative Association (NECA) has faulted the Federal Inland Revenue Service (FIRS)’s request asking companies to pay their taxes in advance.

Its Director-General, Mr Timothy Olawale, who expressed the concern in a statement on Friday in Lagos, said that it would impose additional pressure on businesses.

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The FIRS recently issued a circular calling on corporate organisations to commence payment of their annual returns, earlier than their due dates, apart from their normal monthly obligations.

The circular was dated April 22, 2020, entitled: “Update on Palliative Measures to Cushion Effect of COVID-19 on Taxpayers,” .

The Federal tax collector said that this appeal “has become necessary in order to ease some of the cash flow gaps being experienced by governments at this critical time”.

Responding, Olawale described the pronouncement as ‘ill-timed’, saying it was against a situation when companies were virtually closed due to the lockdown occasioned by the spread of COVID-19 pandemic.

“FIRS has not taken into consideration the holistic nature of industries operating within the global context, the constraints imposed by COVID-19, and its attendant collateral damages on businesses and economies.

“This is a time when governments globally are finding ways to support businesses to ease their burdens, and our country should not be an exception.

“It is noteworthy that corporate organisations know when to file their annual returns according to the relevant tax laws.

“They should only be reminded, and not be harassed by such circular, not even minding the current predicament that endangers livelihoods and businesses, wherein sectors were clamouring for further palliatives to support sustainability of businesses,” he said.

The NECA director-general also faulted the service’s assumption that some companies were experiencing a boom during this time of economic lockdown.

According to him, all the sectors of the economy have felt the effect of the COVID-19 lockdown and some companies are at the verge of closing shop.

“The FIRS is not well informed or aware of the practicality in the private sector, as there are zero operations for businesses, which has to obey the lockdown directives of the Federal Government.

“Businesses in Lagos State have experienced about five weeks lockdown as directed by both Federal and State Governments.

“There were zero operations in several sectors, such as the Iron, Metal and Steel, Hospitality, Aviation, Tourism, Transportation, among others.

“For example, supermarkets operated at 30 per cent capacity, which created problems for the supply chain of the organisation.

“Sales dropped by 70 per cent due to lack of supplies, few hours of working and controlled social distancing,” he said.

Olawale therefore, urged governments to emulate its counterpart in other countries, and put in place more palliative measures to cushion the effects of the pandemic on corporate Nigeria, rather than putting more pressure on them.

“The FIRS will do well to focus on supporting the real sector to be sustainable into the post Covid-19 era.

“This will prevent loss of jobs, which would in turn, contribute toward economic growth through payment of appropriate taxes,” he said.

NAN