By Ediri Ejoh

Stakeholders have called for the review of the Non-Resident Companies, (NRCs) with a view to having more time to prepare their tax returns. Disclosing this at KPMG Tax Breakfast Meeting in Lagos, the Patner, Tax, Regulator and People Services, Adewale Ajayi, of KPMG Nigeria said that the policy needs critical review for a profitable and more practical tax auditing laws.

According to him: “The objective of the meeting was basically to provide a platform where stakeholders in the tax space can engage with the FIRS to clarify certain issues, and it is clear that there are a whole lot of issues that the FIRS have to resolve.

He argued that the policy is on the heels of aggressive taxation, instigated by dwindling oil revenues. ”The era of aggressive taxation is here, revenue has gone down significantly, and the only focus has to be on taxation.

“When you look at most of the states in Nigeria, they are broke; they can’t even pay civil servants, and most of them only generate about 40 percent of their total revenue from internal sources, which is basically tax. So, there’s a need for them to actually increase their internally generated revenue, and the only way they can do that is through tax,” he added.

Ajayi however, cautioned that the tax authorities must be careful, so as not to make it difficult for responsible taxpayers to comply with the laws of the land. For Mr. David Alvins, who works with Hercules, an international accounting firm said that , said there are a lot of challenges ahead with the new system. He said revenues were easy to identify, but that costs are not, especially for non-resident companies with operations in other countries.

Alvis said: “The government and Federal Inland Revenues Services, FIRS, are in for a massive shock. They will be surprised at the revenues they are going to collect, because our margins are reducing. We will comply, but we may not comply on time. However, it is going to be interesting.”

The Coordinating Director, Enforcement Support Group, FIRS, Ajayi Bamidele, who gave a presentation on the ‘Requirement for Non Resident Companies to File Tax Returns with Financial Statements’ hinted that the NRCs are worried, due to the amount of work and effort that goes into preparing audited accounts and computing capital allowances.

“Issues raised at the meeting revolved around the almost impracticability that some NRCs, who are not based in the country, to provide audited accounts for only its Nigerian region, the riddle of capital allowances computation, and the timeframe for compliance with the new policy, among others.”