Bauchi Chamber Urges FIRS to End Delays in Withholding Tax Refunds

The Bauchi Chamber of Commerce, Industry, Mines and Agriculture (BACCIMA) has strongly called on the Federal Inland Revenue Service (FIRS) to immediately address the protracted delay in processing Withholding Tax (WHT) refunds, warning that the practice is severely crippling businesses, particularly Small and Medium Enterprises (SMEs).

The Chamber’s President, Aminu Mohammed Danmaliki, stated at a press conference that companies are required to pay 10% of their contract sums as WHT, which should be refunded upon meeting their full tax obligations.

However, he lamented that bureaucratic hurdles and corruption prevent many firms from receiving their refunds in a timely manner. Danmaliki noted that this delay traps companies’ capital for years, preventing funds that should be used for expansion from being reinvested, thereby “hurting growth and discouraging investment.”

BACCIMA highlighted the unfair double standard in the current system. While FIRS is quick to penalize companies for late tax payments, the agency faces no penalty for its own delays in processing refunds. Danmaliki argued this disparity is unacceptable, proposing that FIRS should pay interest and penalties when it fails to refund taxpayers on time, mirroring the penalties applied to defaulting companies.

“We are not asking for privilege but fairness,” he stressed.

Beyond tax refunds, the Chamber also criticized government agencies for the prolonged delay in paying contractors, even after projects have been certified complete.

Many contractors, including cleaning and security firms, wait for years to receive payment, a situation that pushes businesses into debt and makes it difficult to pay workers.

To resolve these issues, BACCIMA urged major reforms, including:

* Time-Bound System: FIRS must create a clear, transparent system to process refunds within 30 days.

* Penalties and Interest: Delayed refunds must automatically attract interest and penalties.

* Jointly Managed WHT Account: Creation of a WHT Refund Account supervised jointly by FIRS and the private sector to ensure accountability.

* Strict Oversight: The National Assembly and the Federal Ministry of Finance must provide strict oversight to ensure compliance.

The Chamber warned that failure to reform the refund and contract payment system will inevitably lead to more companies closing down, resulting in job losses and slowed economic growth.