According to The Guardian, The Lagos Chamber of Commerce and Industry (LCCI) says recent moves by the Federal Inland Revenue Service (FIRS) to use property value as a basis for Company Income Tax assessment is worrisome.
The LCCI Director-General, Mr Muda Yusuf, told the News Agency of Nigeria (NAN) in Lagos that the move by the FIRS would hurt the economy by undermining investors’ confidence.
Yusuf stressed that adoption of the new model of assessment by FIRS would not only undermine investors’ confidence but also roll back the recent gains of recovery in the economy.
He said adoption of this assessment model by the FIRS was difficult to justify, inconsistent with the law and not harmonious with the best practice principle in taxation.
“The Company Income Tax Act [CITA] is very clear on the basis and methodology for the assessment of company income tax.
“The introduction of property valuation as a basis for assessment is at variance with CITA.
“Besides, there is no theoretical or empirical basis to establish a correlation between the value of a business premises and the profitability of the business.
“Already, corporate organisations in Lagos State are paying the Land Use Charge, which is essentially property tax to the Lagos State Government.
“What is being introduced by the FIRS is for all practical purposes another form of property tax,” he said.
He said that reports reaching the LCCI indicated that many corporate organisations had been served with notices of property inspection and valuation by the FIRS in furtherance of this method of assessment.
The LCCI chief said that the new assessment model was apparently a bid by the FIRS to boost tax revenue.
“LCCI is concerned about this development coming at a time when investors’ confidence is gradually being restored and the economic recovery drive is only just beginning to gather steam,” he said.
Yusuf urged the Federal Government to intervene in the matter, saying that the economic recovery was just gathering momentum and investors’ confidence was just beginning to be restored.
He stressed that any policy measure that could roll back this progress should be avoided.
Source: The Guardian