The Federal Government has set a tax collection target of N8.5tn for the Federal Inland Revenue Service in the 2020 fiscal period. This target is contained in the Fiscal Strategy Paper of the Federal Government which had already been approved by the National Assembly. The amount represents a drop of N300bn when compared to the N8.8tn target for the service in the 2019 fiscal period.
The Chief of Staff to President Muhammadu Buhari, Abba Kyari had, in a letter dated August 8, 2019, which he personally signed, asked Fowler to explain reasons for ‘significant’ variances in budgeted collections and actual collections of tax in 2015, 2016, 2017 and 2018, when the actual amount collected as tax fell below the budgeted target.
Fowler had in his response blamed the drop in the price of crude oil and recession for the shortfall recorded in actual tax collections from 2015 to 2018. The FIRS chairman noted that within the period, the price of crude oil fell from an average of $113.72, $110.98 and $100.40 per barrel in 2012, 2013 and 2014 to $52.65, $43.80 and $54.08 per barrel in 2015, 2016 and 2017.
He also pointed to a reduction in crude oil production from 2.31mbpd, 2.18mbpd and 2.20mbpd in 2012, 2013 and 2014 to 2.12mbpd, 1.81mbpd and 1.88mbpd in 2015, 2016 and 2017. It was gathered that the FIRS in a bid to shore up revenue had started implementing various technology-driven initiatives aimed at increasing the number of taxpayers and reducing their burden by making tax payment more convenient.
One of the initiatives is the integration of the FIRS portal with the Corporate Affairs Commission. This, it was learnt, had been able to reduce the process of stamp duty payment from three days to just few hours. Others are the deployment of electronic payment channels for registration, filing and payment; receipt and tax clearance certificates to facilitate easy remittance of taxes.
The service also came up with information exchange for third-party databases, implemented in collaboration with government agencies such as the Nigeria Customs Service, and the CAC. Since the implementation of these reforms, investigations by our correspondent showed that the number of registered taxpayers had increased from 10 million in 2015 to about 19 million, with the figure estimated to hit 45 million before the end of this year.
The Executive Chairman, FIRS, Mr Babatunde Fowler, said that the service would surpass its revenue target. He told the Senate Committee on Appropriation on Thursday the 24th of October, 2019 that while the service had challenges in the oil sector due to low production volume, initiatives were being implemented to shore up oil revenue. He said, “We believe that the non-oil sector will continue to improve. We are currently at 72 per cent in the non-oil sector.”
https://punchng.com/firs-gets-n8-5tn-revenue-target-for-2020/
