The leadership of the Lagos Chamber of Commerce and Industry (LCCI) has called on the Federal Inland Revenue Service (FIRS) to upgrade itself and begin to use technology and reliable indices in assessing values of companies in times of computing for Company Tax.
The Director General of LCCI, Muda Yusuf said in an interview that the continued adoption of property value as an instrument of assessment is not only undermine investors’ confidence but also roll back the recent gains of recovery in the economy.
According to him, the move is outdated and would hurt the economy by undermining investors’ confidence.
He said adoption of this assessment model by the FIRS was 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 said.
Yusuf disclosed further that reports reaching the LCCI indicated that many corporate organisations had been served with notices of property inspection and valuation by the FIRS in furtherance of this method of assessment.
Continuing, he said “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,” and urged the Federal Government to intervene in the matter to avoid frustrating the recovering production sector of the economy.
