FIRS, LIRS Sign MoU To Establish Joint Tax Audit System

The Federal Inland Revenue Service (FIRS) and Lagos State Inland Revenue Service (LIRS) have signed a Memorandum of Understanding (MoU) to establish a joint tax audit system that will address duplication of efforts and facilitate exchange of data that are relevant to enforcement of extant tax laws.

This bilateral agreement is expected to harmonize tax administration, raise system efficiency and proffer solution to challenges of multiple taxation.
 

Speaking at the agreement signing event held at the State House in Marina, Lagos State Governor, Babajide Sanwo-Olu, said that studies have shown that there would be better service delivery to the citizens and improvement in efficiency of tax collection when the two agencies work together.

According to Sanwo-Olu, the MoU would reduce cost of tax collection, improve customer satisfaction and would lead to more revenue generation for the government to deliver more dividends of democracy.

He said: “We have just witnessed an epoch-making ceremony between the Federal Inland Revenue Service and Lagos Inland Revenue Service. This collaboration did not just happen by chance; it is a conversation we started about a year ago with the chairman of FIRS when both parties reviewed their successes and limitations. It was clear there was a need for a relationship to be consummated. Both FIRS and LIRS have been breaking records of their tax collection and administration yearly, but this is not enough. We have an unimpressive tax to GDP ratio, which ranges between six and eight per cent; this is totally unacceptable.

“Studies have shown that there would be better service delivery to the citizens and improvement in efficiency of tax collection when the two agencies work together. The cost of tax collection would be reduced, we would see better customer satisfaction and more resources would be generated for the Government to deliver more dividends of democracy. For us as a State, we are humble by this collaborative effort and we believe our citizens will be the ultimate beneficiaries of this initiative. The MoU is in the best interest of the public, as it affirms the reason why we need to come together and strengthen the cordial working relationship between the two agencies.”

The Governor noted that the essence of the collaboration is to widen the tax base and bring people to equitability, not to overburden the citizens.

He said that with this collaboration, the government will do more for the people in areas of health, education, and security.

Sanwo-Olu said: “Our Government will continue to raise the bar, so that we can do a lot more with more resources. This collaboration is not to overburden our citizens; it is to widen the tax base and bring people to equitability. This will reduce social burden, because we would have enough resources to take care of the vulnerable.

“This collaboration is a win-win for both agencies and our citizens. It means the Government can do a lot more for the residents and provide resources to take care of their needs in health, in education, safety and security, and in everything that makes life meaningful to our people. We are set to remove red tape in the entire tax administration. This is another beginning for a mutually beneficial relationship between FIRS and LIRS.”

Also speaking at the event, FIRS chairman, Mohammed Nami, said the MoU would help FIRS and LIRS to build capacity in respective areas of specialisation while helping the state government and Federal government to raise revenues for projects and development programmes.

“We will work together as a team during the investigation and have an automatic exchange of information. With this, we will be able to carry out our mandate seamlessly. As part of the joint operation, we will be able to implement presumptive tax as far as issues of tax administration are concerned,” Nami said.

On his part, LIRS chairman, Ayo Subair, said the collaboration would bring about quick solutions to tax disputes and incidents, thereby creating seamless reconciliation of issues.

Present at the event were the Minister of State for Finance, Clem Agba; Commissioner for Finance, Rabiu Olowo; Lagos Attorney General, Moyosore Onigbanjo, SAN; Commissioner for Economic Planning and Budget, Sam Egube; and Commissioner for Information and Strategy, Gbenga Omotoso.