A report by the Auditor-General of the Federation has unearthed tax irregularities amounting to N14.33bn across more than 30 Ministries, Departments, and Agencies, (MDAs).
The findings, disclosed in the Auditor-Generals annual report on ‘Non-Compliance and Internal Control Weaknesses’, highlight serious lapses in tax deductions, remittances, and compliance with financial regulations between 2020 and 2021.
The report revealed that six MDAs were responsible for N129.34m in under-deduction of taxes.
Paragraphs 234 and 235 of the Financial Regulations (2009) mandate accounting officers to ensure that all applicable taxes, such as Value-Added Tax (VAT) and Withholding Tax, are deducted and remitted promptly to the Federal Inland Revenue Service, (FIRS).
However, the audit observed widespread breaches of these provisions. The Federal Road Safety Corps (FRSC) Abuja, was identified as the highest offender, with an under-deduction of N90.57m, while the Federal Ministry of Labour and Employment, Abuja, recorded the smallest shortfall of N623,162.80.
The audit report read, The sum of N129,341,764.04 was the amount of under deduction of taxes by six ministries, departments and agencies. The FRSC Abuja, has the highest amount of N90,579,554.92, while the Federal Ministry of Labour and Employment, Abuja has the least amount, with N623,162.80.
Other agencies implicated include: Federal Polytechnic Bida, Niger State; Nigerian Security Printing and Minting Company Plc, (NSPMC), Abuja; National Water Resources Institute, Kaduna; and Council for the Regulation of Freight Forwarding in Nigeria.
A more concerning irregularity was the non-deduction of taxes, which amounted to N2.64bn across 21 MDAs. The report noted that these agencies failed to deduct taxes from payments made to contractors and other beneficiaries, violating established financial regulations.
The NSPMC, Abuja, led the defaulting agencies in this category with a discrepancy of N1.01bn, while the Federal Medical Centre, Ebute-Meta, was the least offender, with an amount of N617,427.66. Other defaulting MDAs include Nigerian Railway Corporation, Ajaokuta Steel Company, Ministry of Petroleum Resources, Nigeria Police Force, and Corporate Affairs Commission.
The most significant breach involved non-remittance of taxes, amounting to N11.56bn. According to the report, 11 MDAs deducted taxes but failed to remit the funds to the Federal Inland Revenue Service, as required by law.
The NSPMC, Abuja, was again highlighted as the largest defaulter, with a total of N10.39bn unremitted taxes. The Federal Medical Centre, Katsina, accounted for the lowest unremitted amount of N1.37m. Other agencies flagged in this category include Galaxy Backbone Limited; Irrua Specialist Hospital, Edo State; Aminu Kano Teaching Hospital, Kano; and Medical Rehabilitation Therapists (Registration) Board of Nigeria, Abuja.
The Auditor-General of the Federation also uncovered N69.93bn in unrecovered tax liabilities across 26 Federal Inland Revenue Service (FIRS) out-stations nationwide.
The findings, which spotlight lapses in tax enforcement, have raised concerns over the efficiency of the FIRS in recovering overdue tax assessments despite the provisions of the Federal Inland Revenue Service (Establishment) Act, 2007.
The report recommends immediate corrective measures, including capacity building for accounting officers, stricter enforcement of tax laws, and heightened oversight of financial practices in MDAs.
It also urged the FIRS to recover the outstanding amounts and ensure strict adherence to financial regulations to avoid further revenue losses.
