FIRS Rakes N4.5tn Revenue, Says Nigeria’s Tax to GDP Under-calculated
The Federal Inland Revenue Service (FIRS) has collected the sum of N4.9 trillion in tax revenue since January 2021, of which non-oil tax accounts for 77 percent while oil tax accounts for 23 percent of the sum.
The Service also informed that it will through the Ministry of Finance, Budget, and National Planning ensure that all government revenue is henceforth included in the accounting for taxes generated, in order to ensure government revenue is stated correctly and included in the fiscal accounts and annual statistics.
Muhammad Nami, Executive Chairman of FIRS, said this in Abuja on Monday, also informed that the amounts invested by taxpayers in road infrastructure as a result of executive order 007, tax waivers granted pioneer companies, import and exercise duties waived through the operations of the Nigeria Customs and all other revenues generated by MDAs on behalf of the Federal, State and Local governments in Nigeria will be included, to ensure transparency in taxes generated.
Nami said this at a National Symposium on “Taxation and Challenges of External Shocks: Lessons and Policy Options for Nigeria” organized by FIRS in conjunction with the Usmanu Danfodiyo University, Sokoto.
According to him, the above measures, when implemented, will align Nigeria with global best practices in reporting public finance and will ensure a more transparent and more accurate picture of the country’s Tax-to-GDP ratio, which he noted is still low.
Nami also disclosed that the current basis for computation of tax to GDP ratios which mostly focuses on the taxes administered at the federal level, without incorporating revenues generated by the sub nationals and other resources from MDAs does reflect the current situation.
“There is also the need to comprehensively bring all the National and Subnational revenue sources into consideration to properly and appropriately determine the correct and meaningful tax to GDP ratio for the country,” he stressed.
For Nigeria to achieve meaningful and sustainable growth in tax revenue, and minimize dependence on oil revenue, the FIRS Boss further stressed the need for continuous reform of its operations and processes, of our human capital development, the adoption of technology, and the tax laws.
Nami explained that the essence and theme of the symposium is apt given the challenges being experienced globally due to the COVID-19 pandemic with mutations and vaccine resting variants being discovered in some countries.
“We are yet to be free as the social and economic variables are still unpredictable. Therefore, the theme of this symposium is very timely and relevant as it considers policy options for addressing current and future challenges.
“It will review the challenges of the informal sector which constitutes about 70 percent of businesses in Nigeria and reform options available to bring them into the tax net. Another area of considerations would be policy options to get the private sector involved in the critical infrastructure development in Nigeria,” he said.
The chairman announced the launch of the FIRS contact center to ensure a customer-centric FIRS, with more effective and efficient service delivery.
The contact center Nami added, is designed to bridge the communication gap between the taxpayers and the service as it “provides a real-time platform for response to issues and resolution of challenges and concerns that may be raised by taxpayers both resident and non-resident without physically visiting FIRS. ”
The Executive Chairman said the FIRS will consider the ideas and strategies from the symposium and incorporate them in the Services’ cooperate plan from 2022 and beyond.
Boss Mustapha, Secretary to the Government of the Federation, who was represented by David Adejoh, permanent Secretary, political and economic affairs said the N4.9 trillion tax revenue was collected in the first nine months of 2021 due to modernization of tax operations such as the Tax Pro Max launched in June 2021.
“I’m happy to note that in the first nine months of this year, 77 percent of the FIRS N4.9 trillion was from non -oil taxes, while oil revenue accounted for about 23 percent. Tax Pro Max has really helped in revenue generation, but our tax to GDP ratio is still low at 6 percent; lower than some African countries.
Mustapha said efforts need to be intensified in seeking other sources of revenue for sustainable economic growth
Zainab Ahmed, Minister of Finance, Budget and National planning enthused that ideas and resolutions that will emanate from the national discussion would go a long way in proffering policy options for the government in tackling current fiscal challenges.
Ahmed, who was represented by Clem Agba, Minister of State for Budget and National Planning stressed that taxation remains the surest and most sustainable source of government revenue and a potent tool for economic growth.
“It is based on this premise that the federal government has continued to review our tax policy to bring it in line with current realities. The Fiscal initiatives in the annual Finance Act, prioritize non-oil sectors such as primary agriculture production, shipping, and air transport, as well as financial and insurance services,” the minister said.
Speaking further, Ahmed announced that the Ministry is working on a Web App -the EYE MARK- that will assist citizens to “eye mark” and report on government’s projects and programs “earmarked” for their communities using their mobile phones and in “real-time”, and it’s about 90 percent developed.
She said the App will ensure transparency and accountability in the delivery of the government’s capital projects countrywide.