NECA Faults FIRS on Advance Payment of Taxes

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The Nigeria Employers Consultative Assembly (NECA) has described the Federal Inland Revenue Service (FIRS) request for advance payment of taxes by companies as additional pressure on businesses.

A statement issued yesterday by the Director General of NECA, Dr. Timothy Olawale, said the assembly was surprised that the FIRS would be making that request at a time when governments all over the world were finding ways to support businesses to ease their burdens under the crippling impact of COVID-19 environment.

The NECA said: “The 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.”

The statement was issued in reaction to the FIRS’ circular, which requested that corporate organisations should commence the payment of their annual returns earlier than their due dates to ease some of the cash flow gaps being experienced by governments.

“We believe, that, this action by the FIRS connotes that the service’s pronouncement was ill-timed, as against a situation when companies were virtually closed due to the lockdown as a result of the pandemic.

“Corporate organisations know when to file their annual returns according to the relevant tax laws and 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 clamoring for further palliatives to support the sustainability of businesses.

“While we appreciate the need for the FIRS to generate income to facilitate cash flow because of the tumbling prices of oil, there is an erroneous assumption that some companies were experiencing a boom during this time of economic lockdown while in reality some companies are on the verge of closing shop,” NECA said.

It added that the assumption of the FIRS was misplaced and does not have a basis in any economic theory as many of the supposed booming sectors were actually struggling under the weight of added responsibilities arising from the need to provide additional measures to keep them running.

“If the government is experiencing the cash crunch effects of the lockdown as admitted by the circular, then businesses should be worst off. The government should stop considering the private sector as a ‘cash-cow.’ Rather, governments should look inwards on how to cut governance costs,” NECA said, adding that businesses in Lagos State experienced about five weeks lockdown as directed by the federal and Lagos State governments.

“NECA felt that the FIRS probably was not well informed of the practicality in the private sectors as there were zero operations for businesses that obeyed the lockdown directives of the government, which affected several sectors, such as the iron, metal and steel, hospitality, aviation, tourism, transportation, etc.

“We, therefore, urged government to emulate its counterpart in other countries, and to put in place more palliative measures to cushion the effects of the pandemic on corporate Nigeria rather than putting more pressure on them,” it said.

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