CITN charges NASS, State Assemblies to pay taxes on constituency project allowances


The Chartered Institute of Taxation of Nigeria (CITN) has charged the National Assembly, State Houses of Assembly to lead by example by ensuring they pay the taxes on their constituency project allawances.
The President/chairman of council who is also the chief host of the 2020 Tax week Dame Gladys Olajumoke Simplice spoke during the 2020 Tax week organized by CITN with the theme: Tax, Politics and Social Contract in Nigeria.
She said as the country continue to battle with dwindling revenue, it is the right time to ensure the National Assembly members and the State Houses of Assembly members pay accurately the Value Added Tax and Withholding taxes on their constituency project allawances since they are tied to projects.
She therefore called on tax collectors to collect value-added tax and withholding taxes from constituency project allowances of legislators at all levels of governance in the country.
She explained that as tax comptroller in Oyo State and Ogun State she ensured the lawmakers pay up their VAT and withholding taxes on their constituency allowances which she said is still being upheld.
“What I did when I was tax comptroller both in Ibadan and Abeokuta, because I needed to meet up with my target. I sat down and I said the State Assembly they collect constituency allowances, dont they?
“The same thing with the national assembly they collect constituency allowances. Are there no tax implications? “There are tax implications, so FCT IRS chairman it is your duty even if they are not going to pay, they must pay withholding tax because constituency allowance are tied to projects. “They must pay withholding tax and they must pay Value Added Tax. That was what I did and till tomorrow those taxes are being collected both in Ogun State and in Oyo State.
“I went to address the State Aseembly and I told them I have no business with how much they collect as constituency allowances but they should just give my tax.”
She said she only asked her staff to monitor.
“If your constituency allowance is N10m 5% is VAT and 5% iswithholding tax. And 5% withholding tax as it is not going to Limited liability company, we extracted it and it goes to the State and that opened the eyes of the accountant general of the State.
“He said, ‘oh so there are withholding taxes attached to these constituency allowances? And we started collecting and of course I collected my VAT and my target got swollen up and I was bragging.
“This is one of the ways in which we can hold people accountable. Hold people accountable, do your part, think outside the box and do your best.”
He said everyone is a tax payer adding that even for those who lives in estates they used to pay for everything.
“In some of these estates towards the end of the month the gates are locked, you would not be allowed to go out if you have not paid your dues, you are held responsible.
“If we do the same thing from the ward to Council to the house of reps to the Senate we should hold them responsible.
However he said why people can hold their leaders accountable is because they are not paying adequately as at when due their taxes.
“That is why you are not reacting. If you pay adequately as at when due you would not sit down laikadiasically to see people spend tax money anyhow
“Let me tell you, we need to take these things in our own hand. We need to react. People say I am revolutionary I am not. Let me tell you what I did when I was a tax comptroller in Ibadan. It also go back to the political will and the determination to achieve,

“For example somebody say in their estate they want to build and that the road is bad. You can revolt in that estate, carry placards call newspapers and make noise, I can assure you the people who were given that contract would be called back.
She said as for CITN they would advocate just as they did in the ammendment of the finance act.
“The ammendment you see in the Finance act were escalated from the CITN, some of the things we are talking today we will print and escalate.
“Two years ago we went to see the President, we raised some issues from our communique and everything we escalated to him were approved.
“We asked him not to sign the compulsory Federal Mortgage Bank deduction from staff salary and he did not assent to it.”
“Now you asking what your tax money is being used for I keep saying Government does not have a place to pluck money from except tax money revenue
“I recalled a tax payer that stormed into my office and ranted saying he does not see what the Government is doing for him with his tax.
“I said okay, Government is not doing anything for you, and he imports serious building materials, not ordinary materials but the type top politicians use, very fine Italian material.
“At that time it was November and December. I asked him all the materials he imports did he build the airports through which they were imported?
“Or how much tax had he paid to contribute to the building of the airport? He was just looking at me.
“I said even from the airport to Ibadan here even if the road is not good how much is your contribution to that road? He was looking at me and I now asked if he was not going home for Christmas he said he must go home with his family. I said you will either fly or go by road, how much of your tax money?

“The man said, nobody had ever explained to him like that. I am explaining it to you now, pay your own tax, it is when you pay your own tax that you will have the right to demand for accountability.
“If you do not do your own part you have no right to demand for accountability.
“We can only do moralsuation to Government asking them to create the right climate for people to do their business and asking Government to reduce the burden of taxation.
“A lot of it has been done in the finance act 2019. The minimum tax seriously addressed. The removal of SMES from taxation has been addressed. Even company’s income tax has been reduced. I think we should give kudos to this Government, it is not enough but we can always canvass for more.”
The chairman of the occasion Alhaji Kamoru A. Adigun expressed concern that the social contract is one sided.
He said when politicians are being presented they come with their manifesto, people look at it and based on that they are voted in

That he said is one side of the contract however when they get in the expectation is that they will do those things enumerated but at the end people are disappointed

“I am sure that is the reason people are complaining.”
“Coming back to the side of tax collection, tax yield or tax performance I think it is a very complex thing. We expecting a lot of things from the Government but I can tell you Government is doing a lot that we do not know “
He said, “I want to tell you where the problem lies is our present structure, Governance needs to be at the grassroots as it is in the US where everything happens at the grassroots level they have elected representatives that they interface regularly.”
In his welcome address, Chairman Abuja and District Society CITN, Dr. Nwabuzor Emeke said “an important part of every country’s development process is the building of a social contract in which citizens pay tax and, in turn, receive public goods and services”.
Lead paper presenter, DR. Titilayo  Fowokan while speaking on the theme “Tax, Politics and Social Contract in Nigeria” said “tax compliance” by the citizens is low because they want to see what the government has done with the tax revenue. “If you collect one billion naira tax, we want to see one billion naira project”.
The Chairman, Federal Inland Revenue Service, FIRS, Mohammad Nami said it is not the responsibility of the tax administrators to ask how the taxes collected were spent, but that responsibility is for the taxpayers’.
Nami was represented at the CITN Tax Week by a Coordinating Director, Mr. Innocent Ohegwe.