The Lagos State Government has sealed a bilateral agreement with the Federal Government to harmonise tax administration, raise system efficiency and proffer solution to challenges of multiple taxation.
Governor Babajide Sanwo-Olu, on Monday, Governor @jidesanwoolu on Monday, presided over a ceremony where Federal Inland Revenue Service (FIRS) and Lagos State Inland Revenue Service (LIRS) signed a Memorandum of Understanding (MoU) to establish a joint tax audit system that will address duplication of efforts and facilitate exchange of data that are relevant to enforcement of extant tax laws.
The governor described the collaboration as “epoch-making”, noting that the conversation for the harmonization of the two agencies’ mandates started about a year ago, based on the need to forge a common front in widening the tax net to raise the country’s tax to GDP ratio.
The Governor observed that Nigeria had maintained an unimpressive tax to GDP ratio of between 6 to 8 per cent, despite the yearly record-breaking turnovers by both FIRS and LIRS.
He said: “We have just witnessed an epoch-making ceremony between the Federal Inland Revenue Service and Lagos Inland Revenue Service.
“This collaboration did not just happen by chance; it is a conversation we started about a year ago with the chairman of FIRS when both parties reviewed their successes and limitations. It was clear there was a need for a relationship to be consummated.
“Both FIRS and LIRS have been breaking records of their tax collection and administration yearly, but this is not enough. We have an unimpressive tax to GDP ratio, which ranges between six and eight per cent; this is totally unacceptable.
“Studies have shown that there would be better service delivery to the citizens and improvement in efficiency of tax collection when the two agencies work together.
“The cost of tax collection would be reduced, we would see better customer satisfaction and more resources would be generated for the Government to deliver more dividends of democracy.”
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