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.”
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.
Oil component of the N5.320
trillion is N2.467 trillion (46.38 percent), while non-oil element of the
collection is N2.852 trillion (53.62 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 GENERATION
 |
| VAIDS Form |
The 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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