States want FAAC to review 4 per cent cost of collection to FIRS

State governments have raised concern over the quantum sum that goes to the Federal Inland Revenue Service (FIRS) as its four per cent monthly cost of collection, demanding that the Federation Account Allocation Committee (FAAC) should review the law to enable the 36 states get a portion from the pertange.

The states argued that they provided the enabling environment for the collection and remittances of Value Added Tax (VAT) while the FIRS continued to enjoy the benefits.

The Daily Times exclusively gathered that the Lagos State Commissioner for Finance, Mr Akinyemi Ashade, raised the issue during the technical session of the monthly FAAC meeting in September in Abuja.

According to the minutes of the meeting obtained by The Daily Times, the states pointed out that their efforts should be factored into the cost of collection paid to the FIRS.

While supporting their counterpart, the commissioners for Finance of Oyo, Kastina and Niger states insisted that the law be revisited to guide appropriate action on the matter.

But the FIRS representative at the meeting said that the cost of collection was put in place to improve machinery for VAT collection.

Also, the Director, Revenue and Investment noted that the infrastructure put in place by the service in the states had improved the collection.

But the Chairman of FAAC and Minister of Finance, Mrs Zainab Ahmed, while reacting to the argument, accused the states of refusal to remit the VAT and withholding tax in their custody.

The minister said that during a National Economic Council (NEC) meeting, the issue was discussed and agreed on appropriate sanctions against defaulting states.

She rather told the states to use the platform in their domain for the remittances to enhance savings and avoid being sanctioned.

The FIRS has been taking a minimum of N4 billion monthly to its coffers as a four percent cost of collection from the Federation Account.