To foster the rate of adherence to the Pay-As-You-Earn (PAYE) tax system, the Federal Inland Revenue Service (FIRS) has announced that it will be working together with the Ministries, Departments, and Agencies (MDAs).
The disclosure was entailed in a statement appended by Mr Abdullahi Ismaila Ahmad, Director, Communications and Liaison Department. He acted under the orders of the FIRS Chairman, Mr Muhammad Nami.
The step according to Ismail is imperative to stop dubious practices executed by the MDAs which allows them to pay lesser amounts for tax under the Progressive Tax system being operated in the country.
Currently, some MDA workers have not been included in the Integrated Payroll and Personnel Information (IPPIS) platform. These workers have been consistently dodging tax.
Reacting to some police officers concerns about tax deduction according to ranks, Ismail said:
“Nigeria operates the progressive tax system under which the more you earn, the higher you pay.
“However, the progressive tax system also provides a better tax relief package on your dependent relatives compared to the former system through the provision of consolidated tax relief.
“If you earn below N300,000 per annum, for instance, you virtually don’t pay any tax. And even if you earn well above that threshold, the consolidated tax relief system gives you N200,000 per person in the first instance.
“If your earning after this first tax threshold is still above N300,000, the consolidated tax relief system still gives you 20 per cent as tax rebate on the total taxable sum of your earnings.
“This was not the case under the old system where you only got N2,500 tax relief per child,” he said.