N10.1trn Tax Revenue: FIRS Again Breaks Jinx
The Federal Inland Revenue Service (FIRS), government’s agency responsible for assessing, collecting and accounting for tax and other revenues accruing to the Federal Government of Nigeria, have been recording tremendous successes and living up to it’s mandate especially under the leadership of the Executive Chairman, Muhammad Nami.
Prior to the present leadership, the FIRS was seen to be limited in capacity as it could not efficiently facilitate an effective tax collection system through bringing more tax paying entities into the national tax net. And this reflected in low revenue generation for the Federal Government year in, year out.
But amazingly, in 2020, the agency received commendations for exceeding its revenue target in the second quarter (Q2) of 2020; it generated N19.15 billion above its N1.27 trillion target and this was just few months after Muhammad Nami assumed office. More intriguing is the fact that that was the first time in five years (since Q2 of 2015) that the FIRS would be surpassing its revenue target.
In 2021, the Service achieved a record tax collection of N6.405 trillion, representing over a hundred per cent of its collection target for the year and also marked the first time that agency crossed the six trillion mark. And this was despite the economic downturn experienced in the world as a result of the coronavirus pandemic. This was good, but the tax collection agency did not rest on its oars rather it went further to prove that with the right kind of visionary leadership, it can do better and that there are better days ahead for the country. And this it did by building on the success already recorded.
More recently, the agency re-wrote Nigeria’s tax collection history when it announced in its “FIRS 2022 Performance Update” report that it collected over N10.1 trillion in tax revenue in the year 2022, signifying over 96 per cent of its collection target for the year, marking the highest tax collection ever recorded in its history and the first time that the FIRS will cross the N10 trillion mark in tax revenue collection.
Out of the N10.1 trillion collected in revenue, oil sector collection stood at N4.09 trillion (representing 59% of the total collection) while non-oil tax contributed N5.96 trillion (representing 41%). Also, Companies Income Tax contributed N2.83 trillion; Value Added Tax N2.51 trillion; Electronic Money Transfer Levy N125.67 billion and Earmarked Taxes N353.69 billion. Also according to the report, the N10.1 trillion realized from tax is exclusive of tax waived on account of various tax incentives granted under the respective laws, which amounted to N1.8 trillion.
Of course you would agree with me that this unprecedented milestone is not a sheer bit of luck, it did not just happen by chance. It is as a result of deliberate, well thought out plans, strategies and efforts put in place which has now metamorphosed into a jinx breaker in the history of the apex tax administration agency in Nigeria.
The report shed more light on this. It stated that “the Muhammad Nami-led management upon assumption of office came up with a four-point focus, namely: administrative and operational restructuring; making the service customer-focused; creating a data-centric institution; and automation of administrative and operational processes”.
It further noted that over the period of 2020 to 2022, “the management introduced reforms bordering around this four-point at different times and this is what is now gradually yielding fruits. Notable amongst this is the restructuring of the administration of the Service for maximum efficiency and achievement of internal cohesion such that all functional units now work in unison towards the achievement of set goals.
“The Service had also automated most of the administrative and operational processes. A major leap was the full deployment of the TaxPro Max for end-to-end administration of taxes in June 2021. The module for the automated TCC went live 1st January 2023 while taxpayers had already downloaded over 1,000 TCCs this year without having to visit FIRS office.
“It also noted that the Service had operationalised its data mining and analysis system thereby allowing for data-backed taxpayer profiling”.
Another breakthrough that was instrumental to this historical feat in the FIRS is the opening of 25 new satellite tax offices across the country as part of the agency’s goal to “bring tax services nearer to the taxpaying public while bringing FIRS nearer to the public”. According to the FIRS, the purpose of the new tax offices was to “help bring many taxpayers into the tax net, help fill companies income tax, and value added tax as well as monitor compliance with other taxes,”
All these conscious efforts summed up together, birthed the new era that we are witnessing today in the FIRS under the leadership of a seasoned tax consultant and administrator who has proven to be more than equal to the task. The FIRS Boss’ top notch reforms and strategies have not just ushered the agency into a whole new era but also paved way for it to achieve much more than it had achieved in the previous years.
And like the agency rightly said, its goal is to build on the current reforms, identify more areas where it can improve in the delivery and efficiency of its collection, and plug loopholes while deploying innovative reforms in data and artificial intelligence.
By achieving this, it will harness and even improve on its momentum in 2023 to provide sustainable tax revenue that would fund government’s projects, services, programmes and amenities.
Ijanada Jantiku, a public affairs commentator writes from Borno State.
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