No Tax Clearance, No Payments by Government – President Buhari


President Muhammadu Buhari on Thursday said his administration would not make any payments, no matter how small to individuals or companies which are unable to provide evidence of tax compliance from the Federal Inland Revenue Service (FIRS).

He said henceforth, there would be confirmation of tax compliance before any payment can be made to beneficiaries.

He said: “It is now virtually impossible to get any payment, no matter how small from the federal government without being fully tax compliant. Before any payment is made, we make reference to the FIRS to confirm the tax status of that company.”

“No tax, no payment. It’s very simple,” he added.

Buhari also said the federal government would overhaul tax laws and codes to reflect present economic realities as government tries to reduce its over reliance on oil revenue.

Noting that the country had been unable to grow even when oil prices averaged $115 per barrel owing to corruption, wastage, inefficient spending and revenue leakages, Buhari described the current tax to Gross Domestic Product (GDP), ratio of seven per cent as low-a situation which he said had further resulted to the present fiscal imbalance in the economy.

Nevertheless, he assured that going by the various interventions by government, the “Nigerian economy will surely recover.”

Speaking in Abuja at the opening of the 18th annual tax conference of the Chartered Institute of Taxation of Nigeria (CITN), themed: “Fiscal Challenges and Opportunities of the Nigerian Economy,” he said the next few years would be a busy period for tax practitioners in the country.

Represented by the Minister of Finance, Mrs. Kemi Adeosun, he noted that a robust tax system was a prerequisite for economic growth and development.

He said tax collection must be seen to grow in relation to growth in the economy, but he regretted that this had not been the case in Nigeria.

He said tax revenue currently contributed so little to government revenue, adding that government had set an aggressive target to increase non-oil revenue, adding that the current level of compliance remained “very low.”

He maintained that in some cases where there’s compliance, the effective tax rate paying had been lower than expected.

Nevertheless, he said the federal government, as part of plans to reposition the tax system to boost non-oil revenue, will engage with relevant members of the National Assembly to ensure amendments to tax laws can be passed expeditiously to keep pace with the rapid change in business practices.

He said an overhaul of tax laws was long overdue in order to reflect current business practices and new trends.

The president said: “We must respond to the growing phenomenon of blame shifting and other practices that allow companies to evade their fiscal and legal responsibilities.”

He added that government would critically examine the GDP to align taxes with economic activities in a bid to block all leakages.

Specifically, he said the multi-billion naira loses being identified in our solid mineral sector by illegal and undocumented miners would need to the corrected.

Meanwhile, President of the institute, Dr. Olateju Abiola Somorin earlier stressed the need to effect tax reforms and review the Nigerian tax laws.

She said the amendments have become critical and overdue if the country must substantially boost revenue from taxation.

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