Civil Society Organisations (CSOs) have opposed the recent directive by the Federal Inland Revenue Service (FIRS) asking NGOs to obtain their Taxpayer Identification Number (TIN).
According to the convener of the Coalition in Defence of Nigerian Democracy and Constitution (CDNDC) Ariyo-Dare Atoye, highlighted the probably negative impact the new tax would have on NGOs.
He described it as “wicked and unfair” for NGOs to be taxed on the income and still pay extra taxes on purchases and services that follow.
Atoye said, “The NGOs in Nigeria implementing funded projects do have TIN and have been paying taxes on Staff Salaries and allowances, Withholding Taxes on services and purchases like any other corporate entities.
“Except maybe the FIRS is planning or about to introduce another regime of taxation, which may be healthy and could severely impact negatively on the income of the NGOs.
“For instance, it will be wicked and unfair to tax the general income of NGOs and still expect them to pay taxes on services and purchases that will be done after.
“The desperation to generate money at all cost by this government should not be a reason to embark on double and exploitative taxation, which is capable of destroying services, businesses and livelihoods, including making NGO work very difficult.
“The government should listen to experts’ opinions on how to restructure the country and its economy for wealth creation and easy income generation via a fair tax system.”
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Making clarifications on the extent to which NGOs support the payment of taxes, as recognised by extant laws, the Executive Director, Civil Society Legislative Advocacy Centre, CISLAC, Auwal Musa Rafsanjani, said that the government agency should not mix up VAT and PAYE, as the latter is adhered to.
He said, “I think it is important for us all to understand the key issues here. CSOs are exempted from paying VAT or better still CSOs have a zero VAT charge and this is clear going by the law. This is because CSOs don’t generate revenue.
“It also important to note that CSOs are expected to deduct PAYE from salaries of their employers as well as Withholding Tax from consultants who carry out studies and the likes for them and this is also clear by law as these employees are not exempted from paying tax and this is where the need for TIN comes so that these PAYE taxes can be remitted appropriately and tracked and as it stands.
“CSOs like CISLAC currently have these in place in compliance with the law. It is important that no official or citizen confuses these two and I want to believe the FIRS official made an error or was quoted out of context as the law on this is clear.
“Moving forward, the public relations/media department of the FIRS should sensitize citizens and the public on these issues so as not to create confusion. From my own understanding, and available quotes of the FIRS official, the FIRS request for TIN is not new.
“CISLAC has TIN and we remit. I think it is important not to be lumping up VAT and PAYE together. They are all taxes, but they are different. The FIRS on their part also need to properly sensitize the media and citizens on these differences.”
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