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FIRS, LASG sign MoU to create joint tax audit system

Governor Babajide Sanwo-Olu
Governor Babajide Sanwo-Olu


The Federal Inland Revenue Service and the Lagos State Government on Monday signed a Memorandum of Understanding creating a joint tax audit system.

Lagos State Governor, Babajide Sanwo-Olu noted that the plan is to address duplication of measures and enable the exchange of data that are relevant to the enforcement of extant tax laws.

Sanwo-Olu said the signing of the MoU is necessary for the unity of both parties. “The MoU is in the best interest of the public, as it affirms the reason why we need to come together and strengthen the cordial working relationship between the two agencies,” he said.

In 2021, the Federal Government and Lagos disagreed over the collection of Value Added Tax in the state. Following Rivers state’s VAT law, Sanwo-Olu signed a bill into law demanding Lagos also collect VAT. The bill demanded to empower the Lagos State to collect VAT in the state instead of FIRS, an agent of the federal government.

Speaking on the new development, the governor disclosed the need to develop a common front in broadening the tax net to boost the country’s tax to Gross Domestic Product proportion. Despite the yearly impressive turnovers by FIRS and the Lagos Internal Revenue Service, Sanwo-Olu said the country has retained a poor tax-to-GDP ratio of between six to 8 per cent,

“Studies have shown that there would be better service delivery to the citizens and improvement in the efficiency of tax collection when the two agencies work together. The cost of tax collection would be reduced, we would see better customer satisfaction and more resources would be generated for the government to deliver more dividends of democracy. For us as a state, we are humbled by this collaborative effort, and we believe our citizens will be the ultimate beneficiaries of this initiative,” Sanwo-Olu said.

On his part, FIRS Chairman, Muhammad Nami said the MoU would enable both parties to expand in their respective areas of specialisation. He noted it would also help Lagos State and the Federal Government to raise income for projects.

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