The Nigeria Tax Administration Act (NTAA) says banks and other financial institutions will act as third-party debt recovery agents.
The Act, seen by TheCable, said the tax authority may
transfer the responsibility for tax debt recovery to a third party only when
all legal avenues have been exhausted.
According to the NTAA, third-party agents will also be
deployed if the debt is of significant value.
“The relevant tax authority may assign outstanding tax
debts, in whole or in part, to an accredited third party who shall assume
responsibility for recovering the tax debts in accordance with the provisions
of this Act or regulations issued by the Service,” the legislation read.
“The relevant tax authority shall only assign outstanding
tax debts to a third party where all legal steps for tax debt recovery under
this Act have been exhausted, including notifications, payment demands, and
enforcement actions.
“The debt to be recovered is deemed to be of significant
value and has been outstanding for a period considered appropriate by the
relevant tax authority.”
The law further stipulates that any taxpayer whose debt is
handed over to a third party must receive a written notification, including the
details of the party responsible for the debt recovery.
The NTAA also empowers the tax authority to revoke the
assignment at any time and resume responsibility for the recovery process, if
necessary.
“For the purposes of this section — “third party” includes
banks and other financial institutions, debt recovery practitioners, or any
other person accredited by the relevant tax authority,” the Act said.
‘DEBT RECOVERY LAW DOESN’T WEAKEN REVENUE AGENCIES’ POWERS’
Commenting on the provision, Dare Adekanmbi, the FIRS
spokesperson, said the law allowing accredited third parties to recover
outstanding tax debts does not diminish the powers of the tax authority.
He also clarified that the provision refers to “relevant tax
authority,” which includes state-level revenue agencies.
“New as this is, it does not in any way suggest a weakening
of the powers of the tax authority to collect revenue,” he said.
“Furthermore, the section refers to “the relevant tax
authority” which means state inland revenue boards can also act similarly. It
does not necessarily mean FIRS (NRS) alone.”
Adekanmbi said the inclusion of the provision is aimed at modernising Nigeria’s tax administration system to reflect global best practices and align with President Bola Tinubu’s vision “as outlined in his inauguration speech to Nigerians”.
Prior to the new law, TheCable understands that the FIRS
pursued its debtors to the tax appeal tribunal and up to higher courts through
its lawyers.
An economics expert said the agency had always used third
parties, but only to the extent of tax audits.
He said the plan to incorporate banks into the system is an
additional recovery route, but expressed concern about the implementation
mechanism.
Advertise on NigerianEye.com to reach thousands of our daily users
No comments
Post a Comment
Kindly drop a comment below.
(Comments are moderated. Clean comments will be approved immediately)
Advert Enquires - Reach out to us at NigerianEye@gmail.com