Post by miriammuraba on Oct 13, 2018 2:48:43 GMT 4
NIGERIA: FIRS orders the freezing of bank accounts to recover taxes due
The FIRS has been appointing banks as collection agents of taxpayers considered to be in default of tax payments, directing the relevant banks to freeze the accounts of non-compliant taxpayers to prevent them from drawing funds from the accounts.
In terms of section 31 of the FIRS (Establishment) Act, the FIRS is granted powers to appoint a person as an agent of a taxpayer for the recovery of tax payable by the taxpayer, by paying any tax due by such taxpayer from money held by the agent on behalf of the taxpayer.
However, the provision does not define when "tax is payable" for the purposes of exercising the power to appoint an agent and does not specify what must be presented by the FIRS to demonstrate to the agent that the tax is in fact due and payable. This creates a risk that the FIRS can arbitrarily allege that tax is payable and the agent may be obliged to withhold a taxpayer's money even though the tax may be under dispute.
The FIRS has been appointing banks as collection agents of taxpayers considered to be in default of tax payments, directing the relevant banks to freeze the accounts of non-compliant taxpayers to prevent them from drawing funds from the accounts.
In terms of section 31 of the FIRS (Establishment) Act, the FIRS is granted powers to appoint a person as an agent of a taxpayer for the recovery of tax payable by the taxpayer, by paying any tax due by such taxpayer from money held by the agent on behalf of the taxpayer.
However, the provision does not define when "tax is payable" for the purposes of exercising the power to appoint an agent and does not specify what must be presented by the FIRS to demonstrate to the agent that the tax is in fact due and payable. This creates a risk that the FIRS can arbitrarily allege that tax is payable and the agent may be obliged to withhold a taxpayer's money even though the tax may be under dispute.