Checkout How FIRS Plans To Generate N4.9 Trillion To Finance 2016 Budget | Nigeria Newspaper- Nigeria News| Naija News


Checkout How FIRS Plans To Generate N4.9 Trillion To Finance 2016 Budget

Checkout How FIRS Plans To Generate N4.9 Trillion To Finance 2016 Budget
How FIRS Plans To Raise N4.9trn Revenue

The Federal Inland Revenue Services, FIRS under the leadership of Babatunde Fowler, the executive chairman has raised non-oil revenue generation to the federal government coffers to an all-time high. Against a backdrop of N4.957trillion tax revenue target the agency handed down to itself for 2016, it is clear that its monthly remittances to the Federation Accounts Allocation Committee, FAAC have raised the bar of tax receipts in the economy.

Wahab Gbadamosi, spokesman of FIRS told LEADERSHIP Sunday that the Service has been meeting up to 80 per cent of the target by monthly breakdown up to June.

The tax agency plans that Value Added Tax,VAT would account for N2 trillion, representing 40.35 per cent of the total target, while company income tax, CIT would account for N1.877 trillion or 37.87 per cent of the target. In specific terms, these two taxes will provide, approximately, 78 per cent of FIRS’ total revenue target of 2016 leaving 22 per cent of the target to be shared between Petroleum Profits Tax, PPT, Education Tax, EDT and National Information Technology Development Levy, NITDEL. In its blueprint, the FIRS earmarks about 50 per cent increment in CIT using a base of N1.2 trillion. This puts the CIT target at a minimum of N1.8 trillion, and at least 250 per cent increment in VAT collection using a base of N800 billion; a minimum of N800 billion as PPT collection, and a minimum of N280 billion from other taxes.

In the month of June, the Service yielded N165billion to the Federation Account, out-performing both the NNPC and the Nigerian Customs. This feat from FIRS saw the month’s amount for sharing among the three tiers of government go up from N281.5 billion shared in April, N305.13 billion shared in May and N559.032 billion in the month of June.

Findings by our correspondent showed that the tax agency is making much effort at ensuring compliance, including undertaking a nationwide VAT and Withholding Tax monitoring exercise and nationwide tax payer registration exercise anchored by the FIRS Federal Engagement and Enlightenment Tax Teams, (FEETT). The FIRS is also collaborating with relevant stakeholders to ensure effective enforcement of the tax regime just as it is equally expanding its dragnet to capture tax evaders.
A document from the Service which was made available to LEADERSHIP Sunday indicated that between December 2015 and now, the FIRS has stepped up its tax enforcement duties, shutting down over 40 company offices across the country.
Part of FIRS’s efforts at growing tax revenue, according to the document, is its collaboration with the Ministry of Budget and National Planning in designing strategies for enhancing non-oil revenues for the country.

Tax contributes only seven per cent to Nigeria’s Gross Domestic Product (GDP), a situation tax professionals have blamed on recalcitrant attitude of taxable individuals and companies to tax payment and weak implementation of tax regulations on the part of tax authorities.

According to Fowler, only one in every three of corporate organisations in the country pays tax. He said FIRS has resolved to have at least 99.9 percentage success level of compliance. What that means is that every individual and corporate organisation at both the state and federal level that is within the tax net must pay the appropriate tax.
On assumption of office, Fowler directed a nationwide VAT and WHT compliance check. The result of this exercise saw a collection of over N122 billion in three months. The initiative, directly overseen by the office of the executive chairman also recorded a registration of 565,743 new corporate taxpayers as at March, this year.

LEADERSHIP Sunday recalled that while addressing the leadership of the Nigerian Economic Summit Group, (NESG) who paid a courtesy visit to her office in Abuja last week, the minister of finance, Mrs Kemi Adeosun revealed that the federal government was reworking the country’s tax system. “We are already overhauling our tax policy. We want to have a realistic picture of tax,” she said.

The FIRS success master plan includes ensuring a minimum of 90 per cent compliance across all tax types and all taxpayer categories, to be achieved by increased focus on sector based audits to ensure that all audit backlogs are cleared

It also included ensuring maximum possible registration of taxpayers, through a nationwide tax registration drive, which has commenced and which is expected to achieve a target of at least 500,000 previously unregistered campanies by end of 1st quarter, 2016. As at March this year, 565,743 corporate companies have been registered, out of which 2000 have paid various tax types totalling N 395,771,462.93. This strategy is driven by improved use of technology, collaboration with state boards of internal revenue and other relevant state and federal agencies such as Corporate Affairs Commission, Central Bank of Nigeria, Nigeria Customs Service, Banks, tax consultants and private audit firms.

The tax agency is also deploying the use of technology to block leakages and improve efficiency in collection through introduction of auto-VATCollect platform for VAT collection in all key sectors such as telecommunications, power, hospitality, e-commerce and financial services. It is also putting in place Government Integrated Financial Management Information System (GIFMIS)—an electronic platform which will ensure that VAT and WHT is collected from all government contracts and transactions at source.
The tax agency plans to strengthen tax administration by appointing new sector heads to drive tax compliance in different sectors. This will ensure specific focus on the relevant sectors, improve accountability and performance management as well as ensure targets are understood and achieved within agreed timelines. State coordinators have been appointed for each state of the federation, with a coordinator covering a maximum of three states. This will further strengthen tax administration across the nation and build on existing collaborative efforts with State Boards of Internal Revenue Service (SBIRS)
Part of the strategies included plans to improve performance management by a strategic use of reward for performance and sanction for non-performance. Leakages within the tax administration will be identified and blocked, while rewards will be paid to whistle blowers as provided under the FIRS Act.

There will be increased use of taxpayer education, publicity and enlightenment to achieve improved compliance. The strategy is to complement Federal Engagement and Enlightenment Tax Team (FEETT) which has been set up to carry out continuous engagement and enlightenment of taxpayers nationwide.


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