With N8.5tn Revenue Target, FIRS Set To Block N3tn Tax Leakages
The Executive Chairman, Federal Inland Revenue Service (FIRS), Mr. Muhammad Nami yesterday disclosed that the agency was targeting N8.5 trillion revenue for the country in 2020.
He also said that the country was losing about $10 billion (about N3 trillion) of tax currently through illicit profit shifting by multinational corporations, adding that the lost revenue would have helped to address critical infrastructure development by the three tiers of government.
Speaking at the opening of the FIRS 2020 Management Retreat in Abuja, themed: “Repositioning FIRS for Efficient Service Delivery”, Nami said since assuming office, he had launched a comprehensive, ongoing tax collection reform process “anchored on four cardinal pillars of rebuilding FIRS’ institutional framework; robust collaboration with stakeholders; building a customer or taxpayer-centric Institution as well as making the service data-centric institution”, in a determined approach to plug leakages and other identified tax avoidance schemes by individuals and corporate organizations.
Nami said, though this year’s revenue projection was slightly lower than the 2019 target by N300 billion, nevertheless, it hoped to generate N3.7 trillion from oil tax and N4.8 trillion from non-oil proceeds.
Meanwhile, the Minister of Finance, Budget and National Planning, Hajiya Zainab Ahmed; Senate President, Ahmed Lawan; the Speaker of the House of Representatives, Femi Gbajabilamila and development partners have pledged support for the FIRS management team towards improving revenue generation to bridge fiscal deficit and contribute towards actualizing President Muhammadu Buhari’s vision to lift 100 million Nigerians out of poverty.
The minister, in her remarks, said taxation remained the only way out of the present fiscal predicament as well as lifting Nigerians out of extreme poverty.
Represented by the Director, Technical, Federal Ministry of Finance, Budget and National Planning, Mrs. Fatima Hayatu, the minister noted that the theme of the retreat was consistent with the government’s diversification agenda and urged FIRS to help restrategize and implement the Finance Act to yield maximum outcomes.
The World Bank and other development partners also stressed the importance of FIRS to the successes of the present administration’s developmental programmes.
Also, the National Assembly has assured the FIRS that it would help to pass laws that would help to block revenue leakages and strengthen the agency, stressing that “the country really does not need to borrow to fund its deficit if tax revenues are properly harnessed.”
Nevertheless, the FIRS boss further disclosed that his board and management team had further set a target of improving the service’s performance over the next four years by a “minimum target of $5 million staff-to-revenue- ratio and a 10 percent tax-to-GDP ratio”.
Nami also stated that the country’s non-oil taxes accounted for 60 percent of total tax collections in 2019, a demonstration that the service is gradually weaning Nigeria off its dependence on oil revenue.
According to him, the revenue agency will play “strategic roles in the nation’s political economy, including supporting the actualization of President Buhari’s administration’s commitment of moving the country up on the Ease of Doing Business Ranking and taking 100 million Nigerians out of poverty over the next 10 years and rebuilding Nigeria’s critical infrastructure.”
He described this year’s retreat as unique, being the first to be held with a complete FIRS Board in place in the last seven years.
Nami, however, emphasized the need for the agency to aggressively work towards improving its revenue performance going forward.
He said: “In 2019, the Service achieved total tax revenue collection of N5.26 trillion against a target of N8.8 trillion which translated to about 60 percent target achievement for the year. The performance was slightly lower than the 2018 collection of N5.3 trillion by N 57 billion or 1.07 percent.
“Oil tax collection for the year was N2.1 trillion which was 49 percent achievement of its annual target of N4.3 trillion. This accounted for a 40 percent contribution to the total collection. On the other hand, non-oil tax collection for the year was N3.2 trillion which was 70 percent achievement of the annual target of N4.5trillion. This also accounted for 60 percent contribution to the total collection.”
He added: “Looking at our performance in the recent past, one may look at the 2020 target as ambitious, but I can assure you that it is achievable especially with the ongoing reforms and business process re-engineering that is taking place in the service.
“These reforms are aimed at improving both filing and payment compliance, re-activating dormant taxpayers through aggressive intelligence gathering and information sharing and blocking of leakages.”
