Company Tax: LCCI uncomfortable with FIRS new rule

The decision of the Federal Inland Revenue Service (FIRS) to use property value as yard stick for Company Tax Assessment has unsettled the Lagos Chamber of Commerce and Industry (LCCI).The LCCI Director-General, Mr Muda Yusuf, made this position known to the News Agency of Nigeria in the commercial city of Lagos, noting that such action by the FIRS is capable of hurting the economy and engender a loss of confidence on the part of investors.Yusuf emphasized that the new model of assessment to be adopted by FIRS would weaken investors’ confidence and result in loss of gains already made in the economy. He described such move as difficult to justify, inconsistent with the law and not harmonious with the best practice principle in taxation.“The Company Income Tax Act [CITA] is very clear on the basis and methodology for the assessment of company income tax.“The introduction of property valuation as a basis for assessment is at variance with CITA.“Besides, there is no theoretical or empirical basis to establish a correlation between the value of a business premises and the profitability of the business.“Already, corporate organisations in Lagos State are paying the Land Use Charge, which is essentially property tax to the Lagos State Government.“What is being introduced by the FIRS is for all practical purposes another form of property tax,” he remarked.Yusuf said that report at LCCI’s disposal affirmed the new FIRS position, intimating many corporate organisations with notices of property inspection and valuation to comply with the new method of assessment.He however concluded that the new assessment model is an attempt by FIRS to boost tax revenue.“LCCI is concerned about this development coming at a time when investors’ confidence is gradually being restored and the economic recovery drive is only just beginning to gather steam,” he stated.