Home Business Small businessmen assessed through bank transactions to reduce tax evasion – Coordinator

Small businessmen assessed through bank transactions to reduce tax evasion – Coordinator


ABUJA – Mr Saleh Galadima, the FCT Regional Coordinator of Federal Inland Revenue Service (FIRS), said it uses bank transactions to assess small businessmen for tax payment and reduce evasion.
Galadima made this known in an interview with the News Agency of Nigeria (NAN), in Abuja on Saturday.
He said the intelligence unit of the FIRS investigates businessmen whose incomes were unknown through their bank transactions via bank statements.
According to Galadima, as long as they are engaged in legal transactions, we can determine their income but if it is illegal transaction that is where it becomes difficult.
He said about 75 per cent of small business transactions were done through banks, while the remaining 25 per cent could be through medium that may be difficult to determine.
“Also, it is not all illegal transactions that escape taxes because if somebody steals government money and uses it to buy a car for instance, five per cent of that transaction comes to us as VAT.
“So, that is why some illegal transactions are still taxed and that is where some tax collectors collect tax for us automatically.
“But if you are assessing a person, the pertinent thing is that you are limited to what you can see”, he said.
Galadima stated that where a businessman had no proper records, the FIRS guides them to prepare the records for tax assessment.
According to him, “if you sell and take your money to bank, we can catch you through the bank but if you sell and keep your money with you, there is nothing we can do about that.
“We even catch those that sell and pay cash to their suppliers through the suppliers because the suppliers are big businesses that keep records of their daily transactions.
“So we use bank statements to get the picture of the creditors and debtors of the big businesses,” he said.
The coordinator said the service practices “self-assessment”, where business owners are allowed to assess themselves and file returns.
He added that FIRS carries out periodic tax audit to examine their books to determine the correctness of the returns filed.
According to him, if the self-assessment is correct, we collect what you filed but if it is not, we raise “additional assessment” which we ask you to pay with some element of penalty.
“Beyond checking the books, we gather information on your creditors and debtors.
“In spite of this, people still hide from us because we have our limit and people have their limit too.
“But once you are caught, the law says your assessment would be backdated to six years.
“There is nowhere in the world you will get accurate record of transaction of everybody because there is that tendency of evading tax everywhere”, he added.
Galadima said there was nothing like multiple taxation as the law identified the taxes payable by individuals and others to be collected by local, states and the federal government.
He said there could only be multiple taxes if an individual was made to pay one form of tax like personal income tax to the local, state and the federal government. (NAN)

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