Federal Inland Revenue Service (FIRS) has broken Nigeria’s all-time
revenue generation record, after generating N5.3 trillion in 2018.
In Nigeria, FIRS highest revenue generation was previously recorded in 2012, when the agency generated N5.07 trillion.
Tunde
Fowler, FIRS chairman, who announced the 2018 record said the cost of
collection as a percentage of actual taxes collected has been reducing,
as the government is generating more at a time when oil prices are low.
“While
we have been steadily increasing revenue collection over the years, our
cost of collection has actually been going down,” Fowler said.
“In
2016 we collected N3,307 trillion, in 2017 we collected N4,027 trillion
and in 2018 we collected N5,320 trillion. Meanwhile, the cost of
collection as a percentage of actual taxes collected has been reducing;
in 2016 it was 2.6%, in 2017 it was 2.49% while in 2018 it was 2.14%.”
“The
Service has been making tremendous efforts in also increasing the
amount of non-oil revenue it collects. Non-oil collection has
contributed 64.99% in 2016, in 2017 it contributed 62.25% and in 2018 it
contributed 53.62%.
“This represents the government’s focus on
increasing non-oil sources of revenue and the diversification of the
Nigerian economy.”
TheCable had initially reported that the
revenue collection agency was set to break Nigeria’s all-time record,
after it generated N5 trillion in 50 weeks.
FIRS’ generation of
N5.3 trillion is significant as it was at a period when oil prices
averaged $70 per barrel. Oil price was at an average of $100 to $120 per
barrel between 2010 and 2013.
Non-Oil component of the N5.320
trillion is N2.467 trillion (53.62 percent), while oil element of the
collection is N2.852 trillion (46.38 percent).
From audit alone, FIRS collected N212,792 billion from 2278 cases with a huge reduction in audit circle.
Fowler
said only companies that made a profit are obliged to pay taxes, adding
that if a company is situated in Nigeria it is only fair that it pays
its fair share of tax for the benefit of all Nigerians.
He said
FIRS deployed ICT initiatives that enable a taxpayer to pay taxes from
anywhere in the world, at any time, stating that the e-payment channel
has ensured that Nigerians can pay taxes with the click of a button and
also download their receipts.
Other e-Services are the e-Registration, e-Filing, -Stamp Duty and e-Tax Clearance Certificate.
“Taxpayers
can now also choose the tax office where they would like to conduct
their tax transactions. Before now, if one was registered with a
particular tax office, one had to conduct all of their tax transactions
in that office,” he adds.
“However, to make it more convenient
for the taxpayer, they can now choose which ever office they wish to
conduct their transactions with.
He noted that Nigerian taxpayers
are embracing the modern way of tax collection, introduced by the FIRS
through the six e-Solutions.
“We are automating the collection of
Value Added Tax, VAT in key sectors which will facilitate reduction in
compliance cost in the long term. We are doing System to system
integration between banks and FIRS.
“And I am happy to announce
to you that we had a 31% increase year on year in VAT collection in the
banks that have gone live between Jan 2017- Dec 2018 and collected N25bn
so far.
“Amongst others, there is also the Government
Information Financial Management Information System (GIFMIS), which
links FIRS to the Office of the Accountant General of the Federation
OAGF for real-time exchange of information and data.
“We are
also automating the payment of VAT by states through the State Offices
of Accountant General Platform (SAG). This will ensure that we aautomate
and deduct at source and remittance of VAT and WHT from State
governments contract payments directly to FIRS’s account and so far,
collected 13bn.
He noted that taxpayers that requested for and
processed their Tax Clearance Certificate, TCC through tcc.firs.gov.ng,
from the comfort of their homes.
“Tax clearance on the platform
grew from 9,574 – 59,350 within a year of introducing the platform. Auto
VAT collection in key sectors has also facilitated in reducing the cost
of compliance.
“Between January, 2017 and December, 2018 VAT
collection increased by 31% which translates to a collection of N25
billion. Overall, in 2019 VAT crossed the N1 trillion mark.
“Indeed,
VAT is the fastest growing tax type in the world and even rich
countries that did not depend on taxation have now introduced VAT, like
the United Arab Emirates.
“In 2016 FIRS initiated a tax amnesty
programme which attracted over 3000 applications for waiver of interest
and penalties. The programme resulted in payment of over N68 billion out
of about N96.2 billion liability established by the exercise.
VAIDS AIDS REVENUE GENERATIONThe
Voluntary Assets and Income Declaration Scheme (VAIDS), which was
initiated by the federal ministry of finance and the FIRS, received over
5,122 applications under the Scheme.
The Scheme resulted in voluntary declarations of over N92 billion, with over N54 billion paid so far by companies.
Fowler also explained how FIRS ascertained whether those companies with banking turnover of N1 billion are tax compliant or not.
“FIRS
wrote to all commercial banks in May 2018, requesting for a list of
companies, partnerships and enterprises with a banking turnover of N1
billion and above,” he adds.
“This activity was aimed at
ascertaining those companies that are compliant with the tax laws and
those that are not compliant. So far, non-compliant organisations have
paid about N21.75 billion.
“Companies that had a Tax
Identification Number (TIN) and were paying were 45261, those that had a
TIN but were not paying were 40611 and those without a TIN and who were
not paying were 34504.”
The agency has set a target of N8 trillion for the 2019 fiscal year.
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