Power of FIRS in tax administration

Federal Inland Revenue Service

The Federal Inland Revenue Service (FIRS) is empowered by Section 8 of the FIRS Act to assess individuals, including businesses and enterprises, and to collect, account for, and compel payment of any taxes that may be owed to the government or any of its agencies.
The FIRS can order anyone, including a bank, to pay funds belonging to a tax defaulter directly to the FIRS, distrain on assets of a refractory taxpayer, or pursue legal action, among other options, subject to the proper due process.
Since it would be challenging to enforce tax compliance without such powers, it would also be challenging to generate the necessary income for the government, tax experts agree that this is not only a Nigerian issue.
According to them, paying taxes is not something that one would typically desire to do.
Olufemi Olarinde, Technical Assistant to the Executive Chairman, FIRS, stated in an interview that the tax authority is granted unrestricted access to taxpayer information, including their private conversations, in all advanced and developed countries.
“The powers of FIRS extend, even to examine and audit the tax returns made by companies and individuals, which could lead to the taxpayer being asked to pay additional taxes,” stated Chimenka Ezeribe, who also claimed that the FIRS has the authority to look into both businesses and people who may be engaging in tax fraud.
The Nigerian tax system has to be harmonised to enable FIRS take full charge of revenue collection in the country. President, Muhammadu Buhari during the 2022 National Tax Dialogue, said, “Our current tax system is characterised by fragmented administration and multiple (and sometimes, overlapping) taxes. In most tax-efficient nations, tax administrative processes and practices are harmonised within a single system.”
He continued by saying that having many tax administrations is just as bad as having multiple taxes because it breeds instability and uncertainty, but more importantly, it is ineffective.

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