NRS urges taxpayers to embrace voluntary compliance under new tax laws
Kola Oyelere Kano
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The Nigeria Revenue Service (NRS) has urged individuals and businesses to embrace voluntary compliance with the new tax laws, stressing the importance of public awareness, accurate information and proper understanding of the reforms.
The service said providing clear information on tax obligations, available reliefs and applicable procedures would reduce anxiety among taxpayers, prevent unnecessary disputes and strengthen public confidence in the tax system.
Alhaji Ismail Abdullahi, state administrator of the Nigeria Revenue Service (NRS) for Jigawa, Kano and Katsina states. made the call during an engagement with taxpayers and other stakeholders, where concerns were raised about the implications of the new tax laws for businesses, households, states and local governments.
Among the issues discussed were fears that banks might automatically deduct taxes from personal accounts, whether loans and money received from relatives would be treated as taxable income, and the potential impact of the reforms on small businesses.
Alhaji Abdullahi, acknowledged the concerns but emphasised the need for taxpayers to rely on accurate information about the provisions of the laws and the procedures governing tax enforcement.
According to him, the new tax regime does not, by itself, authorise the automatic deduction of taxes from personal bank accounts, noting that tax collection and recovery must follow applicable laws and procedures.
He also clarified that the standard Value Added Tax (VAT) rate remained 7.5 per cent.
On business transactions, the NRS explained that money received as a loan should not automatically be classified as sales revenue or profit, stressing the importance of proper documentation in determining the nature of financial transactions.
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“For instance, if a trader receives N500,000 as a loan, the amount should not automatically be treated as sales or profit. Proper documentation is necessary to establish the nature of the transaction,” he said
The service consequently urged taxpayers to maintain accurate financial records to support proper tax assessments and minimise avoidable disputes with tax authorities.
It also encouraged individuals and businesses to familiarise themselves with the tax provisions applicable to their activities, identify eligible tax reliefs, maintain appropriate records and seek clarification from relevant authorities whenever necessary.
Alhaji Abdullahi further stressed the importance of taxpayers understanding their rights, including the procedures available for challenging tax assessments or decisions.
The engagement focused on three major areas: the provisions of the new tax laws affecting companies, individuals and businesses; practical steps for achieving voluntary compliance; and measures to close the tax compliance gap through improved taxpayer services.
On practical compliance, he highlighted the need for proper registration, accurate record-keeping, reconciliation of transactions, timely filing of returns, payment of taxes and prompt responses to official correspondence.
The third area examined the challenges taxpayers encounter in fulfilling their obligations and explored practical solutions to improve service delivery and make compliance easier.
Participants were encouraged to share their experiences and identify difficulties associated with meeting tax obligations, including conflicting interpretations of the laws and challenges arising from digital tax processes.
The NRS official said feedback from taxpayers would enable the service to identify gaps, improve its procedures and provide more accessible support to individuals and businesses.
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The service reiterated that effective tax administration required shared responsibility, with the NRS providing clear guidance, consistent treatment and accessible assistance, while taxpayers supplied accurate information, maintained proper records and fulfilled their obligations within stipulated deadlines.
Abdullahi expressed optimism that improved public understanding, transparent procedures and responsive taxpayer services would strengthen public trust, encourage voluntary compliance and enhance the effectiveness of the country’s tax administration system.