The Federal Inland Revenue Service (FIRS) has decried a systemic abuse of the pioneer incentive scheme.
The scheme, which was instituted by the Federal Government, has been abused so much that the country is losing tax revenue for the three tiers of government.
The FIRS made this revelation during a courtesy visit by state commissioners of Finance to Revenue House, headquarters of the FIRS in Abuja.
As a result of the abuse, the FIRS has vowed to plug this tax revenue leakage in order to generate more revenue for the three tiers of government.
Coordinating Director, Tax Operations Group, FIRS, Mr Femi Oluwaniyi, decried the indiscriminate tax waivers and incentives granted to undeserving companies which, according to him, has impacted negatively on revenue generation.
Mr. Oluwaniyi disclosed that the FIRS had discovered that pioneer status certificates had been issued to companies that were not pioneers of their fields in the real sense, hence undeserving of such status.
He stated that this development had led to the loss of considerable tax revenue to the three tiers of government.
However, the FIRS has hinted that it was auditing its findings with a view to pressing for the cancellation of pioneer certificates issued to undeserving companies in violation of the law.
The FIRS stated that pioneer status otherwise granted outside the law would not enjoy tax relief, regardless of the certificates issued to them and owners of such certificates have been requested to regularize their tax positions “otherwise sanctions shall apply in accordance with the law”.
Earlier, Executive Chairman of the FIRS, Mr. Muhammad Nami, stated that tax revenue accounts for nearly 70% of what was shared at the last FAAC meeting and lauded the collaboration between the service and the state commissioners of finance, saying this was key to bringing about increase in tax revenue.
He said without this collaboration, it would be difficult for government to meet its obligations to the citizenry in such areas as infrastructure development and salary payment which could lead to social dislocation.
The Executive Chairman charged the states to focus on other forms of taxes like the Stamp Duty which he described as “the black gold” which had been ignored before now.
He also charged all ministries, departments and agencies to scrupulously deduct withholding tax from contracts at points of payment.
Mr. Nami solicited the states’ support for taxpayer sensitization campaigns and education, stating that rental obligation was incomplete without the payment of stamp duties.
He emphasised that if these initiatives were pursued at both local and state levels, more revenue would be generated.