FIRS Director nabbed and arrested over N5 million tax fraud

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On January 29, 2016, The Economic and Financial Crimes Commission, EFCC, arrested Abumere Joseph Osagie, The Deputy Director, Regional Tax Office, Federal Inland Revenue Service, FIRS, in a case of abuse of office and bribery.

The suspect was picked following a complaint about his attempt to extort a university proprietor N5 million.

Osagie and Jamila Ojora had on January 27, 2016 allegedly approached Senator Ahmed Datti, the Chancellor of Baze University, Abuja and gave him a tax assessment of N20,029,496 through a letter of intent, which he paid.

However when he requested for the assessment certificate, they refused to oblige him. Instead they allegedly demanded for N5 million gratification.

All pleas by him fell on deaf ears. Consequently, the Chancellor of the University then petitioned the EFCC, and was advised to play along (Just like in Farouk Lawan and Femi Otedola case).

Consequently, a  bribed of N5 Million was arranged and marked (to serve a evidence) and was delivered to the director (Osagie) through Ojora in a sting operation (some of you will call this a set-up).

Ojora was arrested after she collected the N5m. His confession later led to the arrest of Osagie.

The houses of the suspects were searched by operatives of the EFCC, and documents were recovered.


As a Tax Consultant, this menace has been in Tax Practice for long and I must commend the effort of the Chancellor for taking up this matter. I enjoin all Tax Payer to emulate him and join in the battle of fighting corruption. I keep-on educating Tax Payer that having additional Tax Liability as a result of Tax Audit or investigation conducted is not a crime and does not mean heaven will fall. There are laid down procedures to address excessive Tax Liabilities. Tax Liability given by tax officer who conduct Tax Audit is not FINAL and CONCLUSIVE. The process can be taken away from them and handled with another bodies for intervention (just like you have hierarchy of court, to further your case if not satisfied with decision of lower court).

But because TaxPayers in Nigeria does not know their right, overzealous Tax Officials, while sitting at his desk can use the Letter Head of his office and send out harrassment letters to Tax Payers with the sole aim of scaring them with tax issues and at the end of the story the case will be settled via bribe. This is gross abuse of office. No matter how you present documentations to defend your position, the corrupt tax officers will still use the MIGHT of their office to insist that their findings is FINAL and CONCLUSIVE. The experience in Lagos state is more of concern. Lagos state will go to the back-door to obtain Ex-Parte order to lock down your office with the intention to force you to come to their office and do a gentleman’s negotiation (Bribe).

Over the years, Tax Officers has been in total control of Tax Practice, you find them acting also as Tax Consultant and/or Tax Practitioners while still in the employment of FIRS. Some even act as Auditor by preparing Audited Account right in their office. They do this by picking a copy of Audited Accounts already filed with them by a Chartered Accountants and merely change the Name of the Company and other unwanted information. The consequence of this is that the Chartered Accountants are left with no jobs to do and if they have at all, they will be at the mercy of Tax Officers who controls every aspect of Tax Practice.

The former FIRS Chairperson, Mrs Ifueko Omogui-Okauru introduce some reforms to address this issue and equally increase the salaries of the Tax Officers and other work conditions. During her tenure, I as a Tax Consultant experience huge sanity in the system. Collection of TAX CLEARANCE CERTIFICATE was never an herculean task. The closest FIRS chairman that emulated Omogui philosophy was Samual Ogungbesan who merely acted in Acting capacity before handing over to the present FIRS Chairman Tunde Fowler.

My conclusion is that, all Tax Payers should stand up for their right, they should ensure they pay legitimate taxes and ready to to fight the CORRUPTION aspect of the system (just like the Chancellor did in the case above). Together, we can help the present administration in the fight against corruption by doing our part such as saying NO to paying bribes and accept to do the RIGHT THING at all times.

Tax system is never meant to be used as a weapon to oppress and enrich the few, it is meant to manage the income inequality and source of revenue to Government, therefore Tax System should wear HUMAN FACE. In this era of relying on taxes to fund Government’s budget amidst corrupt tax officers, Tax Payer should expect though times and be ready to do what the Chancellor has done per above in order to survive the corruption in the Tax System.

Thank you



FIRS gets N4.21trn revenue target for 2014

The Federal Government has given the Federal Inland Revenue Service (FIRS) a N4.21 trillion revenue target for 2014.

Alhaji Kabir Mashi, the Acting Executive Chairman of the Service, stated this on Monday in Abuja at the 2014 Corporate Plan Retreat and Enlarged Management Meeting of the Service.

He said that the Service was expected to collect :

N1.79 trillion from Petroleum Profit Tax (PPT),

N1.03 trillion from Companies Income Tax (CIT) and

N96 billion from gas component of CIT.

N861 billion from Value Added Tax (VAT),

N10.21 billion from Capital Gains Tax,

N8.46 billion from Stamp Duties.

N156 billion, from Education Tax

N59 billion from Personal Income Tax

N10.6 billion from Technology Levy.


He said that FIRS surpassed its 2013 revenue target by N337 billion or 7.56 per cent, adding that it collected N4.805 trillion as against the targeted N4.468 trillion.

He, however, stated that the actual collection from non-oil revenue in 2013 fell short of government’s target of N2.188 trillion by three per cent, but assured that it would be improved on in 2014.

“One proactive step that has been taken in respect of growing non-oil revenue tax is the take-off of the Capacity Enhancement Programme (CEP) towards delivering additional non-oil revenue in the current year.

“We have every intention of sustaining and hopefully improving upon the standards that the service has come to be known with in terms of delivering results in recent time,’’ he said.

Mashi said that the retreat was aimed at further addressing FIRS management’s desire to grow tax revenue for development, particularly non-oil revenue which held significant potential.

Earlier in her welcome address, Mrs Queen Seghosime, FIRS’ Coordinating Director, Direct Report Group, said that the meeting was an annual forum where important strategic decisions of the Service were taken.

Seghosime added that the retreat would provide the management team the opportunity to brainstorm on the organisation’s corporate plan to meet its revenue forecast and corporate aspirations. [plulz_social_like width="350" send="false" font="arial" action="like" layout="standard" faces="false" ]

Stamp Duties Tax in Nigeria

The Stamp Duties Act requires that all written instruments, including instances where any property or interest in property is or are transferred or leased to any person, must be stamped.

Generally, Stamp Duties is charged at the rate of 75 kobo for every N200 of the consideration of certain real estate transactions like mortgages, while for conveyances or the transfer or sale of real property, the stamp duties rate is 75kobo for every N50. The Stamp Duties rate for lease and rental agreements is 16kobo for every N200 of the consideration of the lease or rental agreement.

Any written document that is not stamped is not allowed to be received in any judicial proceeding in Nigeria until the stamp duty and the resulting penalty for the non-payment of the stamp duty is paid.

The complex nature of collecting stamp duties as it relates to contract notes was once confused in the stock market with stockbrokers claiming that they are being threatened by the Federal Inland Revenue Service (FIRS) and Nigerian Postal Service (NIPOST). However, the controversial issues had since been resolved. For the purpose of clarification, the provisions in the Stamp Duty Act which prescribe that stamp duties on certain categories of documents such as agreements, contract notes among others, could be denoted by adhesive stamps is a demonstration of government concern for cost efficiency achievable through lower compliance cost and minimal cost of administration. This arrangement of convenience does not in itself imply the ceding of FIRS stamp duties collection responsibility to any agency. The responsibility for stamp duty collection is solely vested on FIRS. With specific reference to the collection of duties on contract notes, FIRS is to collect all stamp duties payable through the Commissioner of Stamp Duties, while NIPOST engages in the supplies of adhesive stamps where the duty payer excises the option to do so.

There are fines and other penalties for any failure to pay stamp duties on any written instrument that is not exempted from the payment of stamp duty.

Again in Lagos State, the flat Stamp Duty rate of 2% of the consideration of the property transaction is charged when applying for Governor’s consent to the transfer of any interest in a landed property.



According to the Federal Inland Revenue Service, Minimum Tax is justifiable on the premise that every asset generates income. The Minimum Tax regulations is therefore a anti- tax avoidance measure which is charged whether or not the affected company declares a profit, or the company was dormant during the relevant year of tax assessment.

Where a company is dormant, Minimum Tax is usually charged on the company’s net asset or on its share capital, whichever is higher of the two.

Many companies have closed businesses without liquidation or winding up and there are also companies that were registered and have remained dormant without the owners been aware that the dormancy of their companies attracts minimum tax and minimum corporate affairs commission compliance requirements.

The Companies Income Tax Act (as amended) provides that where in a year of assessment, the ascertainable profits of a company, from all sources, results in a loss or where the company’s ascertainable profits results in no tax been liable for payment, or where the tax payable is less than the statutory minimum tax allowable, such a company shall be liable to be charged and to pay a statutory minimum tax, which amount will be dependent on whether the company has a annual turnover of less than N500,000, or more than N500,000.

A company with an annual turnover of N500,000 or less, that has been carrying on business for at least four (4) years, is liable to charge to a Minimum Tax of any of the higher of the following sums:

(i)     0.50 per cent of the company’s gross profit; or
(ii)    0.50 per cent of the company’s net assets; or
(iii)   0.25 per cent of the company’s paid up share capital; or
(iv)   0.25 per cent of the turnover of the company for the relevant year of tax assessment.

Where however, the turnover of the company is more than N500,000, the minimum corporation tax payable shall be the higher of the above rates that is charged for companies with an annual turnover of N500,000 or less, plus 0.125 (or fifty per cent) on the excess of the turnover that is above
N500,000 will be charged as Minimum Tax.

Exemption from Minimum Tax Regulations

Companies that are involved in agricultural production or businesses, with companies that have not carried on business during the first four years of their incorporation, or companies that have at least twenty-five per cent imported equity capital fully paid for by a foreign company, are among the
exempted corporations to whom the minimum tax provisions stated above do not apply.

Capital Allowances and Minimum Tax

For each year of tax assessment in which Minimum Tax is payable, the capital allowance for that year shall be computed together with any unabsorbed allowances brought forward from the previous years, and these shall be deducted as far as possible from the assessable profits for therelevant financial year, and carried forward to the next financial year.

Dormant Companies and Minimum Tax

The general perception that dormant companies are not liable to pay any tax at all as they are not engaged in any trade or business is not correct. As a tax-avoidance measure, Minimum Tax is charged on the higher amounts of such a dormant company’s gross profit, or on its net assets, or
on its paid-up share capital, or on its turnover, at the rates stated above. The only exemptions to this rule are as also stated above.

To avoid penalties for non-compliance, owners of companies that are dormant for any reason, or are not making any profits, will do well to contact their Tax Advisers for compliance in order to avoid tax penalties that could compound the financial obligation of the company.

Our Worry-Free Tax Services

You don’t need us to tell you that tax is not getting any simpler. Scarcely a day seems to go by without the announcement of some new practice, initiative, statutory instrument or case law decision. Keeping ahead of the game in tax is getting to be a full-time job. And when you add on what a practising professional needs to know in other areas of the profession, the task can seem daunting.

We have dedicated team who specialise exclusively in tax and we can help you in many ways in meeting your demands in the tax arena. We give independent expert advice on all direct tax matters affecting owner-managed businesses and their owners, ranging from a quick second opinion by phone through to implementation of an entire tax planning strategy or the management of a complex compliance, statutory filing and disclosure requirements. We can be as high- or as low-profile with our client as you wish: you may want to introduce us as a specialist external consultant or you may want us to remain invisible and for your tax administrator never to know that that amazingly clever tax-planning wheeze wasn’t entirely your own creation! It’s entirely up to you.

All our advice is competitively and transparently priced in advance.  .