Conflict sorounding the collection of VAT between the Federal Inland Revenue Service and some states continues to take a new turn each day when two additional states, Ogun and Akwa Ibom, claim that they are ready to legislate to collect the tax in their states.
This is because certain FIRS employees are in fear about recent initiatives by states to collect value added tax on Sunday.
Three members of the FIRS workers' union made public that it could lower the Agency's commission by as much as N96bn if we removed FIRS' capacity to collect VAT.
In a paper given to the National Assembly, the FIRS indicated that by 2022, both imported and non-import VAT would be allowed to collect N2.44tn.
The FIRS has projected that it will get N96bn in 2022, which takes 4% of the sum collected as VAT for its commission.If the states start collecting VAT, the FIRS will lose that large amount, a prominent source within the tax authority."Our main source of income is oil tax and VAT," the insider said. Others include stamp duty, taxation on companies and a couple more. VAT is the second figure for us and we receive performance-based bonuses.
We will be unable to give FIRS bonuses and other special packages to the employees when we cease collecting VAT. As it is, many of us are afraid that we don't know what is next to happen.
Another senior official said FIRS had hired too many staff and had a high salary rate,and that the service would have to reduce its employees once VAT payment is removed.
Another employee remarked, 'One huge trouble at the FIRS, because of our own patronage system in this nation, where the holders of political offices are granted slots.that means that we have too many employees and that we have a very large salary and overhead costs. If some of us aren't sacked we'll be lucky."
Personnel costs are N107.52 billion, overhead costs are N47.22 billion, and capital costs are N61.9 billion in the FIRS' N216.65 billion budget for the fiscal year 2021.
The FIRS had roughly 9,000 employees the agency was chastised for frivolous expenditures like setting aside N160 million to sew clothes for 850 drivers, budgeting N825 million for refreshment, and a security vote of N250 million, among other things.