FIRS Should Stop Promoting Unreasonable and Outdated Law On Fixed Assets - THE DAILY CRUCIBLE

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Thursday, May 12, 2022

FIRS Should Stop Promoting Unreasonable and Outdated Law On Fixed Assets

                •Gbenga




The Daily Crucible | Thursday, May 12, 2022

 In Nigeria of today, I respect some Government Agencies for their forward thinking and daily improvement in the use of Technology. Federal Inland Revenue Service (FIRS) and Lagos State IRS is one of such.

Recently Ogun State IRS also upgraded the payment system such that when you want to pay your tax, a bill is generated and the bank account you will see on the invoice will show your name.

 I pray that we would be able to continue and stop the stupidity of stopping anything good once there is a change in government .

Few days ago, the entire country went on rage among Professionals over one circular emanating from FIRS asking Companies to ensure they obtain Acceptance Certificate for Qualifying Capital Expenditure of N500,000 and above.

 This Law was made in the '70s when such threshold has a value of over N1.4b.
The Industrial Inspectorate Act promogated in 1970 was relevant at that time but not in today's Nigeria.As at that time the value of one Naira to US Dollar was $4.7260. It means if you compare that with the value today and try to maintain the same position, the asset class that is used as bench-mark requiring such certificate is as analysed below:

N1,000,000 worth of asset then will be $4,726,000. If you compare that with the exchange rate of today which has reversed through mismanagement of our Economy and Monetary Policy (by men who ought to face their duty of strengthning the system but allowed  greed and selfish interest to divert their attention from their responsibilities ) over the years what you get from  N1m worth of asset is about N2,835,600,000.

The implication of the above is that the only asset that qualify for any company to seek acceptance certficate is over N1.4b.

Please note billion and not million.
Apart from this, does it mean that in all these 23 years of the new unbroken democracy, nobody in the National Assembly saw any irrelevant provisions of this archaic law and deem it fit to make amendment or a complete deletion.? Anyway today is not to talk about what people like to do and why they want to go to National Assembly.

In a country where we hear noise of amendment everyday, where are my Colleagues (Chartered Accountants) in the National Assembly? Those that have practiced before as Chartered Accountants ? Where are you? Where are the Real Learned Men( Lawyers Called to Bar or even those with LLB) in the National Assembly? Why should we be going backward instead of going forward.?

Looking at it from another angle, the requirement of substantiating the value of Asset over the years does not require this archaic law.Third party document is enough as evidence to prove the asset value.

 Another angle is to look at Ease of doing business, why do we enjoy or derive pleasure in disturbing people that are running our economy ( By that I mean employers of labour and people in the private sector)?

Why do we enjoy adding to the burdens of people that we should be encouraging.?Where is the ease of doing business we all need to embrace?

 If you buy just two laptops, one Printer and 1 table today, you are in excess of N500,000. 

Let us do the mathematics, for that you now need to go and apply for Acceptance Certificate and travel to Abuja from Lagos with the current aviation fuel cost and airline ticket, you will spend about N350,000 for ticket and hotel which is almost  the value of N500,000 asset.

They will also come for inspection..wasting our dwindling resources on nonsense voyage that can only encourage corruption.

Let us stop all these nonsense here please.

 Where are the business minded men in the government ?

The value of N1,000,000 dollar worth of asset when compared to what it was then in 1970  to the dollar is now like $1,667. Then it was $4 7m. 

The  implication of  that is that, such Law should not have a place here now at all. Nobody should talk about this or similar policy now.We have too many battles and stress to contend with .

FIRS is trying to do espirit de corp to make the Federal Inspectorate Division of Ministry of Trade happy or what ? Common! We must stop this child's play and  get serious.

Why not tell State Government to demand the Tax Clearance Certificate of those who purchased N100m or 50m or 20m forms and get see what they paid in the last 10 years.

Then insist that anyone who could get a form of N100m should show tax payment evidence of N120m in three years...Then you will see those who can show face.

Let us stop adding more trouble to our people.We have enough crisis on diesel cost and lack of electricity than to be facing another trauma again.

Two  years ago some team started going from company to another  claiming they are from  ministry of labour and productivity. What are they producing? 
They want to check the workforce and their welfare in private companies.
How many Government agencies, ministries and department have good toilet and flowing water, good table, good ceiling, yet someone is bold to say he wants to check people who they should go and learn from.

Worst of it is that, at  that time,  Doctors and different bodies in government were on strike. Who should supervise who? Who should learn from who? 

Some people will go round claiming to be fire service inspectors and so many other agencies whose house are not in order.
There are some government agencies that are not sure of when they will have light in their offices.Some have no printer,  no table, no chair and such agencies will say they are inspecting private companies they should beg to teach them how to run their affairs.

How can we just not have little shame and stop disturbing people that are creating jobs and the little  sanity we  have in the land?

Everyday,  you just see different people sending letters out  in the name of one oversight or inspection or the other loaded with hidden Agenda.In fact beyond their terms of reference .

People just do what they like.In fact Police is getting better everyday. DSS is getting better daily. EFCC is gettng better everyday too but the civilian agencies of government accusing police, DSS and EFCC  are now the one causing trouble for people in Nigeria. Why? 

FIRS should withraw that circular and all men and women preparing to reap another set of fruits from the labour of pains of private companies in the name of outdated and irrelevant acceptance certificate should just go back to their office and think of how to develop Nigeria and not how to add to our pains.

Manufacturers Association of Nigeria(MAN) NECA and SMEDAN should RESIST this forthwith.It cannot stand the test of time in this current crisis on Power, Exchange rate and many jeopardy on the economy.

I respect FIRS handling of things,  especially Technology like Tax Pro Max (which can be made better and better everyday) and as such should  not allow any agency to stain their white clothe of development with red oil.

God bless Nigeria. God bless those creating jobs and providing platforms for our economy to run.


The Author ;
Dr.Gbenga Adeoye holds a PhD in Management Accounting, a Bachelors Degree in Law( LLB).

An MSc.in Banking and Finance, a diploma in Criminology and Security Studies, 

He also holds a Post Graduate Diploma in International Business Law from The University of London.

He is a Fellow of the Institute of Chartered Accountants of Nigeria.(FCA) and a member of International Federation of Accountants ( IFAC).

He is a Fellow of The Chartered Institute of Taxation of Nigeria.( FCTI)

He was part of  3 Nigerians trained at Harvard Business School, Boston USA  on Innovation and Building New Businesses in Established  organisations in 2011 along with other CEO's and Heads of Strategy  from multinationals all over the world.

He is the founder and Principal Partner of Gbenga Adeoye & Co.(Chartered Accountants)

He is a member of Egba Economic Summit and Nigerian Economic Summit Group.

He is a member of  Professional Practice Committee (PPC) of the Institute of Chartered Accountants of Nigeria. The Committee that brought a lot of innovations to  Practicing  Licence Processes of ICAN in 2021/2022 Presidential year.

He is also a contributor  to National Policy on Taxation, Development Economics  and Good Governance.

He is the founder of Gbenga Adeoye Foundation; an NGO focused on the eradication of poverty, ignorance and sickness in Nigeria especially in the rural areas.

He is Passionate about Social & Economic Development of Africa and Nigeria.

He believes the quality of people in leadership determines development in any country.

He can be reached via e mail : dga@gbengaadeoye.com

TEL : +(234)8034050773

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