The Federal Inland Revenue Service (FIRS) on Tuesday, signed a Memorandum of Understanding with the Nigerian Communication Commission (NCC) to be allowed to integrate an Application Programming Interface (API) technology solution with the systems of telecommunication operators for independent verification of the amount of VAT that should be paid by mobile network operators (MNO) rather than relying entirely on the operators’ books of accounts.
The telecom regulator says that this will ensure the tax agency ascertains accuracy and completeness of value added tax (VAT) elements and other taxes payable in the transactions of telecoms operators. Speaking during the MoU signing ceremony in Abuja, Umar Garba Danbatta, the executive vice chairman of NCC, said that diligence and appropriate due processes were undertaken to conclude the MoU, as the Commission took its time to understand the import of the MoU.
According to him, “Our concern, as regulator of the telecoms industry, is that we needed to be sure that it is not another way to tax telecoms operators, who are already dealing with multiple taxation issues. We have also ensured that the integration of the solutions with telcos’ transactions systems will not, in any way, impact the cost and quality of service delivery by the operators to telecoms consumers.”
Danbatta assured telecoms consumers and stakeholders that the integration of FIRS solution with the operators’ systems is entirely to ascertain the accuracy of the VAT elements being paid by the operators on their transactions and will not, in any way, degrade the quality of service delivery or lead to high cost of service to the consumers.
Muhammad Nami, the executive chairman and chief executive officer, FIRS, thanked the NCC for accepting to collaborate with the tax agency. He said the MoU is mainly to ascertain completeness of tax transactions of mobile service providers to the Federal Government due to the shift of physical businesses to electronic-based business activities.
“The API, which was developed in-house, is transaction-based and all we are trying to do is to ensure we have the basis for determining the completeness and accuracy of VAT elements in telecoms transactions,” Nami said.