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Home Economy

Auditor-General Uncovers N14bn Tax Fraud Across Over 30 Government Agencies

Stephen Akudike by Stephen Akudike
November 29, 2024
in Economy
Reading Time: 2 mins read
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Senate Committee Frowns at N17 Trillion Loss from Tax Waivers, Urges FIRS Reform
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A recent report by the Auditor-General of the Federation has exposed tax irregularities totaling N14.33 billion within more than 30 Ministries, Departments, and Agencies (MDAs). The findings reveal significant lapses in tax deductions, remittances, and compliance with financial regulations between 2020 and 2021.

The details were disclosed in the Auditor-General’s Annual Report on Non-Compliance and Internal Control Weaknesses, which highlighted the extent of financial misconduct in the MDAs.

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Tax Under-Deductions

The report revealed that six MDAs were responsible for under-deducting taxes amounting to N129.34 million. The Federal Road Safety Corps (FRSC) in Abuja emerged as the largest offender, under-deducting taxes by N90.57 million. At the other end of the spectrum, the Federal Ministry of Labour and Employment recorded the smallest shortfall at N623,162.

Tax Non-Deductions

In another category, the audit uncovered a more alarming issue: a failure to deduct taxes entirely. This malpractice accounted for a total of N2.64 billion across 21 MDAs. The Nigerian Security Printing and Minting Company (NSPMC) in Abuja led this group, failing to deduct N1.01 billion in taxes, while the Federal Medical Centre in Ebute Meta recorded the lowest discrepancy at N617,427.

Non-Remittance of Taxes

The most significant breach, however, involved the non-remittance of deducted taxes. According to the report, 11 MDAs deducted taxes amounting to N11.56 billion but failed to remit them to the Federal Inland Revenue Service (FIRS), as required by law. Once again, the NSPMC was flagged as the highest offender, with N10.39 billion in unremitted taxes. The Federal Medical Centre in Katsina accounted for the smallest unremitted amount at N1.37 million.

Unrecovered Tax Liabilities

The audit also identified N69.93 billion in unrecovered tax liabilities across 26 FIRS outstations nationwide. The offices in Akwa Ibom, Cross River, and Bayelsa States collectively accounted for the highest unrecovered liabilities at N26.32 billion. In contrast, the FIRS office in Gwagwalada, Abuja, recorded the least unrecovered amount at N4.18 million.

Implications and Recommendations

The report raises serious concerns about the efficiency of tax enforcement mechanisms and compliance with financial regulations in Nigeria. Paragraphs 234 and 235 of the 2009 Financial Regulations mandate accounting officers to ensure the prompt deduction and remittance of taxes such as Value Added Tax (VAT) and Withholding Tax. The breaches documented in the report suggest widespread negligence and inefficiency in implementing these provisions.

The findings have prompted calls for stricter oversight and accountability measures to prevent further tax fraud and enhance revenue collection. Stakeholders emphasize the urgent need for systemic reforms to address the underlying weaknesses in financial governance within government agencies.

Tags: #NigeriaAuditor-GeneralTax Fraud
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