FIRS seeks international firms collaboration to tax tech companies
The Federal Inland Revenue Service (FIRS) has called for collaboration among African countries and international stakeholders to explore alternative rules that would subject digital businesses and base eroding tax payments.
Executive Chairman of FIRS, Muhammad Nami, who made the disclosure at the African Tax Administrators’ Forum (ATAF) Technical Assistance Program explained that the potential cost of managing and enforcing the complicated rules will significantly outweigh the expected money generated by their implementation.
He said, “Our analysis continues to show that the possible cost of administering and implementing the complex rules will far outweigh the expected revenue accruing from its implementation. I, therefore, urge the African Tax Administrators Forum (ATAF) to join the discussion at the UN Tax Committee of Experts.”
FIRS aims to expand on other international standards for the taxation of multinational corporations, such as tax treaties, information exchange, and transfer pricing rules.
The FIRS chairman emphasized the importance of members’ capacity building in the areas of base erosion and profit shifting by multinational firms, as well as taxation of the digital economy.
He said, “This is instructive, considering the implementation challenges that developing jurisdictions will face due to the complexity of the Pillars I and II rules. It is crucial for the ATAF technical assistance to look toward improving the capacity of member-countries’ tax administration through the digitisation of operations.”
Nami urged ATAF to organise peer-to-peer knowledge sharing sessions between beneficiaries of the technical assistance programmes and intensify technical assistance on international tax rules, particularly in the areas of tax treaties, transfer pricing and exchange of information.
Nairametrics
