The Federal Inland Revenue Service (FIRS) has said that it has sent a proposal to the federal government for a law on road tax.
Executive Chairman of the agency, Mohammed Nami disclosed this during an interactive session organised by the house of representatives committee on finance on the 2022-2024 medium-term expenditure framework/fiscal strategy paper (MTEF/FSP) for ministries, departments and agencies (MDAs) in Abuja on Wednesday, August 18.
When a member of the committee, Afolabi Olalekan asked Nami to explain what FIRS has put in place to tackle tax evasion by people in the informal sector, he responded by saying that one of the measures include the introduction of road tax.
He said “What we have done on the informal sector at a time was try to propose what we call a presumptive tax to the national assembly but in the course of doing that we face a bit of challenge and we did not submit the proposal yet, simply because we discover that there is an act of the national assembly that exempted businesses with a turnover of about N1 to N25 million. So if you already have that, you can find it difficult to say come and pay presumptive tax. Presumptive tax is a tax that we just give you form to say based on your own estimate, how much have you generated this year and you say 12 million, then we say pay maybe six per cent of that 12 million and you go because you are not an organised sector. But there is a law which has exempted every business with a turnover of N1 and N25 million so you find it difficult to implement such a thing. The second thing we are doing of which we have already done is to create a department called intelligence, strategic data-mining and analysis department; which the only thing these young boys and girls do on a daily basis is just to gather intelligence on companies and particularly these informal sector, analyse them and then escalate those gap that they identify for the purpose of tax assessment and tax collection. Number three thing we are thinking of, and we will surely come back to the national assembly on that, is to introduce road taxes. Road tax is necessary because all over the world there is no way we would see people that will use roads for free. As is it today, even if you are able to give an entire N10 trillion to the Federal Republic of Nigeria, it will not be able to fix the roads in Nigeria, just the roads in Nigeria alone. So what we have decided to do is to propose the introduction of road taxes to the federal government through our special tax operations department so that at least 50 trucks that would be plying these roads for free at any given point in time, comes across a toll gate or probably somewhere that we are going to use an electronic device to collect it without necessarily erecting toll gate. We are aware that the owners of these trucks, don’t pay anything to the government, they don’t get the FIRS certificate. So up to 15 or 20 trucks that will ply the road that is built with a personal income tax that I pay and you pay and then they don’t pay taxes. That is what we want to identify.”