The Federal Government is adopting technology to connect into mobile phone companies’ networks for independent verification of VAT payment.
The telecoms regulator and tax counterpart that are collaborating on the valued added tax (VAT) verification scheme assure that mobile network operators that have often borne the weight of multiple taxations by government may soon heave a sigh of relief.
Under the plan, the Nigerian Communications Commission (NCC) and Federal Inland Revenue Service (FIRS) say they signed a Memorandum of Understanding (MoU) to jointly address broad issues of multiple taxes imposed on telecoms companies.
Specifically, they have collaborated “to ensure the tax agency ascertain accuracy and completeness of value added tax (VAT) elements and other taxes payable in the transactions of telecoms operators”, Dr. Henry Nkemadu, Director, Public Affairs, NCC says in a statement made available to Technology Times.
VAT Payment: API Automate Verification of Telcos
Nkemadu says the inter-agency collaboration will also see FIRS integrating an application programming interface (API) technology with mobile network operators to independently verify the amount of VAT payable, “rather than relying entirely on the Operators’ books of accounts.”
Professor Umar Danbatta, Executive Vice Chairman of NCC says that “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.”
The NCC chief says the agency has studied the full implications of the MoU for telcos before signing with the FIRS.
Danbatta assures 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, Executive Chairman and Chief Executive Officer, FIRS, says the API will be “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.”
According to him, 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.”