The Federal Inland Revenue Service (FIRS) says it is working closely with Ministries, Departments and Agencies (MDAs) to increase the rate of compliance with the remittance of Pay-As-You-Earn (PAYE) tax.
The service stated this in a statement issued by Mr Abdullahi Ismaila Ahmad, Director, Communications and Liaison Department, in Abuja on Thursday.
Ismaila said the FIRS Chairman, Mr Muhammad Nami, said this when he paid a courtesy call on the Inspector-General of Police (IGP), Mr Mohammed Adamu, at Force Headquarters, Abuja.
Nami explained that it was necessary to block loopholes being exploited by the MDAs to pay lesser tax than they should pay under the Progressive Tax System being operated in the country.
He disclosed that there were remnants of MDA workers who had not migrated to the Integrated Payroll and Personnel Information (IPPIS) platform.
He said such workers were exploiting the inadequacies of the old salary system to dodge tax, adding this was unacceptable as the service was moving fast to address it.
Responding to issue raised by some police officers during the courtesy call on variations in taxes among different categories of workers, Nami said: “Nigeria operates the progressive tax system under which the more you earn, the higher you pay.
“However, the progressive tax system also provides a better tax relief package on your dependent relatives compared to the former system through the provision of consolidated tax relief.
“If you earn below N300,000 per annum for instance, you virtually don’t pay any tax. And even if you earn well above that threshold, the consolidated tax relief system gives you N200,000 per person in the first instance.
“If your earning after this first tax threshold is still above N300,000, the consolidated tax relief system still gives you 20 per cent as tax rebate on the total taxable sum of your earnings.
“This was not the case under the old system where you only got N2,500 tax relief per child.” he said.
The FIRS boss commended the Police for making appropriate remittance on PAYE tax deducted from their personnel’s salaries.
He also lauded the Police for their support to the FIRS, especially in enforcing tax compliance nationwide.
Nami however, charged the Police to apply same approach to deduct withholding tax, value added tax (VAT) and one per cent Stamp Duty on contractual transactions they have with their contractors and service providers.
He pledged to continue to engage the Police and other tax payers as well as collecting agents in clearing up all grey areas in tax matters.
In his remarks, Adamu commended the FIRS for its diligence in collecting tax, which he said was applied to pay “our salaries and build public infrastructure,”
He enjoined Nigerians to willingly pay their taxes for their benefits and the country at large.