S/N

Paragraph of Bill

Subject Matter of FIRS Bill 2005

Remarks

Recommendations

1

Title

An Act To Provide For The Establishment Of The Federal Inland Revenue Service Charged With Powers For Collection Of Revenues Accruable To The Government Of The Federation And For Matters Connected Therewith.

The functions of the Service should be properly reflected.

The phrase “Assessment and” should be inserted between “for” and “collection”.

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2

The object of the Service shall be to control and administer the different taxes and laws specified in the First Schedule or other laws made or to be made, from time to time, by the National Assembly or other regulations made thereto by the Government of the Federation and to account for all taxes collected.

This is to reflect the full object of the Service.

 The phrase “Assessment and” should be inserted after “taxes” in the fourth line of S.2.

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4
 11(2)(a)

The Chairman and other members of the Board, other than ex-officio members, shall each hold office-

In order to effectively judge performance and avoid the inherent danger of an unbroken six years term, there is a need to split the terms in office.

Substitute the phrase “maximum of two terms of 3 years each” for section 4(a).

Substitute the word, “their” for the word, “his”.

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   3(2)

(2)“The Board shall consists of-
(a) the Executive Chairman of the Service as Chairman;
(b) four Deputy Chairmen who shall be appointed from among the Directors of the Service;
(c )  a representative of the Attorney –General of the Federation;
(d) the Deputy –Governor of the Central Bank  in charge of operations;
(e) a representative of the Minister of Finance not below the rank of a Director;
(f) the Chairman of the Revenue Mobilisation,Allocation and Fiscal Commission or his representative who must not be below the rank of a Director;
(g) the Group Managing Director of the Nigerian National Petroleum Corporation or his representative  who must not be  below the rank of a Group Executive Director of the Corporation or its equivalent;
(h)the Comptroller –General of Customs or his representative not below the rank of Deputy Comptroller-General in the Custom Service;
i)the Registrar-General of the Corporate Affairs Commission or his representative not below the rank of  a Director; and
(j) the Chief Executive Officer of the National Planning Commission or his representative not below the rank of a Director.

The Chartered Institute of Taxation of Nigeria as a statutory body charged with the responsibility of regulating the tax profession in Nigeria needs to be represented on the Board.

To include as follows
“(k) A representative of the Chartered Institute of Taxation of Nigeria on the recommendation of the Institute”.

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“(b) manage and superintend the policies of the service on matters relating to the administration of the revenue collecting system under this Act or any enactment or law”
c) “review and approve the strategies plans of service, including plans for training”

Typographical errors need to be corrected to avoid creating a meaning different from the original intention of the law.

The following typographical errors to be corrected

(b) “superitend” to replace “superintend”

(c ) “Service” to replace “service”

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8(q)

(q) Issue taxpayer identification number to every taxable person in Nigeria.

Taxation of individual income is generally within the jurisdiction of the state, it is therefore more appropriate to use the word, jurisdiction..

Substitute the phrase “within its jurisdiction” for ‘in Nigeria”.

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9(1)

(1) There shall be a technical committee of the Board(in this Act referred to as “the Technical Committee”) which shall consist of –
(a) the Executive Chairman of the Service as Chairman;
(b) the Deputy Chairmen of the Service;
(c ) all the Directors and heads of departments of the Service;
(d) the Legal Adviser of the Service; and
(e) the secretary to the board

The Chairman may be too occupied and  it is also not appropriate for the Executive Chairman of the Service to be reporting to himself or  herself.

Delete  section 9(1) (a) and replace 9(1)(b) with the following-

(b) Deputy Chairmen of the Service, one of who shall act as the Chairman.

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9(2)

The Technical Committee may co-opt from the service such staff as it may deem necessary for the effective performance of its functions under this Act.

To avail the technical committee the benefit of the experience of experts who may not necessarily be in Service

The phrase “and external experts outside the service related to the subject under discussion” should  be inserted after the word “staff”.

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 11(1)(d)

(1) The Executive Chairman shall-(a)be appointed by the President;
(b)be the chief executive and accounting officer of the Service;
(c )be responsible for the execution of the policy and the  day- to- day administration of the affairs of the Service;
(d)  have cognate experience and skills in accountancy, economics, taxation, law and related fields.

There is a need to establish minimum standards of qualification and experience for anybody seeking the office of the Executive Chairman of the Federal Inland Revenue Service.

Section 11(1)(d) should be amended to read-
 d) have cognate experience in taxation or accounting or law or economics and related fields with a minimum of ten years post qualification experience

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11(3)(d)

(3) There shall be for the Service, four full- time Deputy Chairmen who shall –
(a) be appointed by the President from among the Directors of the Service on the recommendations of the Minister;
(b) hold office for a single term of 6 years and no more;
(c ) upon their appointment cease to hold the office as Director in the Service
(d) have cognate experience and skills in accountancy, economics, taxation, law and related fields; and
(e) perform such duties and functions as may be assigned to them by the Board or the Executive Chairman.

There is a need to establish a minimum standard for the position of Deputy Chairman.

Section 11(3)(d) should be amended to read-
 d) have cognate experience in taxation or accounting or law or economics and related fields with a minimum of eight years post qualification experience and a member of the Chartered Institute of Taxation of Nigeria.

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15(a)

(a) an amount not less than 4 per cent of all non-oil revenue collected by the Service in the preceding year as may be appropriated by the National Assembly as administrative charge  or cost of collection; and

Funding the Board through retention of 4% of non-oil revenue collected by the Service has constitutional implications, even though it is desirable.

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23(3)

(3) Any tax refund shall be made within 90 days of the decision of the service made pursuant to subsection(2) of this section, with the option of setting off against future tax

There is a need to charge interest at CBN rediscount rate to serve as a disincentive to issue of over payment.

Insert” interest at CBN rediscount rate” preceding “with the option of setting off against future tax”’

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35(4)

(4) Where any investigation under this section reveals the commission of any offence or an attempt to commit any offence, the Service shall submit its findings to the relevant law enforcement agency and the Attorney-General of the Federation for purposes of further investigation or prosecution.

The Service is meant to be concerned with the issue of tax related offences.

Insert the word “tax” after the word “any”

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62

A part of a law cannot be repealed, a law either stands or falls in its entirety.

S.62 (1) (2) (3) shall be deleted and substituted with the following-

(62) “The Federal Board of Inland Revenue   is hereby dissolved upon the commencement of this Act; notwithstanding the dissolution, this shall not affect anything done or purported to have been done under the enactment”.

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12(4) 

69

(4) The Service may appoint and employ such Consultants, including Tax Consultants or Accountants, and agents to transact any business or to do any act required to be transacted or done in the execution of its functions or for better carrying into effect of the purposes of this Act:
Provided that such consultants shall not carry out the duties of assessing and collecting tax or normal and routine responsibilities of tax officials.

In this Act, unless the context otherwise requires-

There is a need to ensure that only those trained in the practice of taxation who are members of the Chartered Institute of Taxation of Nigeria are called Consultants. The membership of the Institute are broad based and includes legal practitioners and accountants.

The provision in section12 (4) and the definition of “consultants” in section 69 should be reviewed.

…..” “consultants” includes accountants, legal practitioners or any other recognised professionals that have been certified by Chartered Institute of Taxation of Nigeria.