FIRS hikes tax collection by N77.9bn, to hit N4.012trn in 9 months

.As Fowler urges NASS to criminalise tax evasion

The Federal Inland Revenue Service, FIRS, said it has collected the sum of N4.012trn in three quarters (January-September 2019), representing an increase of N77.89 billion, while compared to N3.941 trillion collected during the same period of 2018.

This is just as the Executive Chairman, FIRS, Tunde Fowler, while addressing the Senate Committee on Appropriations in Abuja over the weekend, called on Senators to pass legislation that will send tax evaders to jail.

Solid mineral sector contributed N52.75bn revenue in 2017 –NEITI

The Head of Communications and Servicom Department of the FIRS, Wahab Gbadamosi, in a statement, quoted the FIRS boss to have stayed that a total sum of N4.012 trillion was collected for January to September 2019 which is 61 per cent of total target for the period as against N3.941 trillion collections for the corresponding period in 2018.
According to the tax collector agency boss, this translates to an increase of N71 billion. Full-year tax revenue collection in 2018 was N5.320 trillion which represents 78.86 per cent collection performance to the target for the period.

“Kindly note that our budget for 2019 was raised by N2.02 trillion representing 30.4 per cent increase over the 2018 budget i.e. N6.747 trillion in 2018 to N8.8 trillion in 2019. Our total tax collection to date represents 78.2 per cent achievement of the corresponding budget of 2018. Based on the collection, we expect total collection to equal N5.4 trillion by the end of 2019.

“We are pleased to report that our drive towards developing more sustainable sources of tax revenue by shifting the focus from oil revenue to non-oil is also yielding positive results. Non-oil revenue collection for January to September 2019 stands at N2.423 trillion representing 72 per cent achievement of the non-oil target for the period while Oil revenue collection of N1.588 trillion represents 49 per cent achievement to target for the period. The total collection contribution in 2019 shows a percentage ratio of 61 per cent for Non-oil revenue to 39 per cent for Oil revenue, while Non-Oil collection for January to September 2019 grew by 13 per cent over the Non-oil collection for the corresponding period in 2018.

“Noticeably low inflow of revenue from PPT for 2019 thus far, is as a result of the shortfall in PPT estimates filed by the International Oil Companies (IOC). This is resultant from huge losses carried forward and tax incentives arising from the Modified Carried Agreements (MCA) by Joint Venture (JV) partners, unutilized Investment Tax Credits carried forward by the Production Sharing Contract (PSC) contractors which subsequently reduced the profits available for Petroleum Profit Tax (PPT). This is further compounded by production constraints which have continued to fall below the projected figure of 2.3 million bpd for the year,” he explained.

Fowler during the 2020 budget proposal hearing at the Senate also called on Senators to pass legislation that will send tax evaders to jail.

“In Nigeria, if you have the courage to pass laws that will send tax defaulters to jail, the 40,000 tax defaulters will pay. As it is, over 40,000 taxpayers who have between N100 million and N 1billion as turnover in their accounts, who are not paying taxes will quickly pay their taxes. This is as just a little over 3000 of the taxpayers who have a lien on their accounts have paid N103 billion.

“In terms of whether revenues cannot be generated by enforcement, we have gone over various programmes to bring people into the tax net. Before this in 2016, there was a tax amnesty in which 5000 companies came through and they also paid N92 billion within 45 days. VAIDS was also N90 billion. And it took one year. The question I’d like to ask you is can N90bn make a difference in a developed or even a developing country? It will make a lot of difference. These are businesses or individuals that have income but had refused to pay taxes.

“Currently, we have close to 40, 000 of those accounts under lien for which they have not paid any taxes and I believe that this is a crime the society and I think that we are at that point now where we have no choice than to enforce payment,” he said.

Also, he dispelled the allegation of the federal government not giving incentives to small businesses.

“I will first start with incentives. It was true that the past government, the government before this one did give a lot of incentives. And if you look at the history of business and incentives regardless of which country you are in, businesses do no grow because of incentives, they grow because of they believe that they can make profits and of course, they want certainty. But in terms of incentives for the small scale businesses with turnovers of N25 million and bellow, within the Finance Bill that has also been submitted for approval, there is a recommendation to reduce the Companies Income Tax (CIT) rate from 30 per cent to 20 per cent.

“Over the last few years, from 2015, we had waived all interests and penalties for small scale businesses that did not remit taxes or up-to-date with their filing. Also, we have decided with the Ministry of Finance and government to assist the small scale businesses and I believe that the office of the Vice President did indicate through the President that we’d try to make sure that there is a policy that 40 per cent of local expenditure is given to local businesses which include the small scale businesses,” Fowler explained.