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By Omodele Adigun
“I tasted VAT refund process in South Africa early this year. It was totally painless. At the point of departure, I was issued a credit card. That all I have to do is to give them 48 hours once I get to my country. I just put the credit card inside ATM machine, and money comes out. This is the kind of system we need to start developing in Nigeria,” says Mrs Adebimpe Balogun, the former President of the Chartered Institute of Taxation of Nigeria (CITN).
Recall that following the launch of the Payments System Vision 2020 (PSV2020) by the Central Bank of Nigeria (CBN) in 2007, whose objective is to make the Nigerian payment systems internationally recognized and nationally utilised, the country is now witnessing monumental explosion in electronic payment.
In line with this, the Federal Inland Revenue Service(FIRS), in collaboration with Nigerian Interbank Settlement System (NIBSS) and approved revenue collecting banks, had designed a new payment platform called e-tax Pay.
The e-tax Pay is an online self-service tax payment system whereby the taxpayers are given an opportunity to pay taxes through their banks’ online payment portal.
According to FIRS, this is to assist taxpayers pay their taxes with maximum ease, while making the operations of the tax authority friendlier, convenient and conform to the global best practices. With the initiative, taxpayers can do it themselves, using the electronic service channels provided by their banks. These include internet banking, ATM and other mobile banking platforms.
But Mrs Balogun noted that so many challenges still beset the system, particularly in accessing the platform for tax refund. “There at least opportunities, we should ensure sustainable tax regime. Sustainable tax regime has to be dynamic. So our tax has to be dynamic in order to have sustainable tax regime,” she said.
The ex- CITN boss was particularly concerned about tax refunds. For instance, Section 16 of Value Added Act states that excess input VAT may be carried forward as credit against future VAT payable. Alternatively, Section 23 of FIRS establishment Act (FIRSEA) provides for a cash refund on application within 90 days of FIRS decision subject to appropriate tax audit.
But Mrs Balogun slammed the system, saying tax refunds should be painless and prompt. “It is never a tax system that you won’t get your money back when it is clear that the government owes you. It does not impact confidence into that system; there would be no trust. VAT is supposed to be refundable system. Now unfortunately, you have to go through too much procedures: tax audit goes through finance ministry etc before you can even get any amount due to you back and that would take years. If you overpay Withholding Tax, they say they would give you (tax) credit. What of if you are in persistent credit position, which happens to some organizations in the country. So refund has to be prompt so that taxpayers feel comfortable that even if I overpay, I would get my money back.”
On what needs to be done to leverage on the e-payment channels to get refund, she said:
“I tasted VAT refund process in South Africa early this year. It was totally painless. At the point of departure, I was issued a credit card. That all I have to do is to give them 48 hours once I get to my country. By the way, I would have indicated in what currency I wanted my refund.Is it Pound Sterling?Is it Dollars? Is it Naira? If it is Naira, I just put the credit card inside ATM machine, and money comes out. This is the kind of system we need to start developing for ourselves in Nigeria.”
On this issue, the e-tax pay is not so explicit.
Conditions to meet before using e-tax pay platform:
•You must have registered and obtained Taxpayer Identification Number (TIN).
•You must have an account with the bank.
•You must have sufficient funds in the account to cover the tax liability/transaction.
Having satisfied the conditions above, then; select e-tax Pay from the list of services displayed on the bank self-service channel or request for this service from the bank.
•Provide all the required information, including the taxpayer`s TIN.
•Select the tax type (e.g. Company Income Tax, Pre-operation Levy, Value Added Tax, etc.).
•Enter the amount to be debited from the account provided.
•Confirm that all the information provided are correct and valid.
•Submit the request.
When this process is completed, the platform will notify FIRS online real time. Also FIRS has online access to the tax portal to view transactions real time to know taxpayers that have made tax payments.
