…meets 98% target in 2020
Nami attributes feats to reforms
Despite COVID-19 challenges, the Federal Inland Revenue Service (FIRS) collected N4,952,243,711,728.37 tax revenue in 2020. FIRS Executive Chairman, Mr. Muhammad Nami, confirmed the figure yesterday in Abuja while briefing journalists on performance of the tax authority in 2020. He said that the amount realised represents approximately 98 per cent of the national tax target of N5.076 trillion set for FIRS by the Federal Government.
Nami said the near 100 per cent tax collection feat by FIRS was achieved amid debilitating effects of COVID- 19 on the Nigerian economy; low price of crude oil in the international market, business disruptions and lootings during the #EndSARS protests; generous tax waivers granted by FIRS to ease the impact of COVID-19 shutdown; additional tax exemptions granted to small companies in the 2019 Finance Act; and insecurity in some parts of the country.
While analysing the significance of the 2020 performance, he noted that the Service recorded this feat at a time when the price of oil hit an all-time low. In other words, oil, which used to contribute over 50 per cent in tax returns through the Petroleum Profits Tax in previous years, accounted for only 30.6 per cent contribution to the tax revenue generated in 2020. He added that the non-oil tax collection was 109 per cent in 2020, which is nine per cent higher than the previous year.
Nami attributed the FIRS’ revenue generation success in 2020 to some reforms initiated by the board and management of the Service under his leadership. The reforms included capacity building for members of staff; improved staff welfare package; promotion and proper placement of staff; deployment of appropriate technology for tax operations; segmentation of taxpayers to ease tax compliance; and continuous collaboration with relevant stakeholders, among others.
He commended taxpayers and FIRS staff team for the their support and devotion to work, which made the performance possible despite the numerous obstacles encountered by the Service in 2020. “FIRS is optimistic this current fiscal year 2021 will be better than 2020. We shall perform exceedingly well, given that our Service reforms are expected to yield greater dividends, especially as different parts of tax administration are being automated.
“We are also optimistic that exploration activities will improve in the oil sector and increase the prospect of higher tax revenue from the sector. Similarly, the on-going reforms by the Service, coupled with increased stakeholder collaborations, will brighten the prospect of improved voluntary compliance and consequently higher tax revenue generation for the country this year and beyond,” he said. Though he said revenue target for 2021 had yet to be given to the agency, he expressed optimism that FIRS would surpass last year revenue performance. “To ensure improved revenue performance for the year, our emphasis shall be on indirect taxes.
Indirect taxes such as Value Added Tax (VAT), withholding tax are easy to collect and easy to remit. The National Tax Policy of 2010 harps on indirect tax. Our emphasis is going to be on indirect tax 2021 and beyond,” he said.