FIRS’s Impressive N5.3trn Revenue in 2018

0
1006

When Babatunde Fowler was appointed the Executive Chairman of the Federal Inland Revenue Service (FIRS) in 2016, he vowed that the agency would substantially surpass previous revenue generation record of the agency. Fowler has not disappointed. He has taken FIRS to the next level. Revenue generation has been on the rise in the last three years, following the reinvigoration of the agency by Fowler. The most remarkable is the record N5.3 trillion generated in 2018. It was the highest revenue ever generated in its history.

Fowler actualized his dream, despite the fact that crude oil, a key source of revenue for the FIRS, oscillated between $50 and $70 per barrel in 2018.

Notwithstanding the dwindling oil prices and economic restrain in 2018, the FIRS worked hard in ensuring taxes are collected and remitted for the benefits of the nation and all three tiers of government by targeting non-oil revenue. FIRS under Fowler adopted initiatives that ensured a robust tax administration that is agile and beneficial to all stakeholders. These gave birth to the record N5.3 trillion collected in 2018.

The target of the FIRS for 2019 is N6 trillion and beyond. It looks on the high side, but Fowler and his team are already working on this target. The FIRS boss sheds more light on this at a recent stakeholders summit: “In addition to the traditional objective of reviewing past performance and setting targets for the future, we intend to discuss strategies for enhancing collaboration between FIRS and its critical stakeholders; particularly the National Assembly with the view of explaining details of our operations and ultimately to improve overall organizational performance to achieve 2019’s target of N8 trillion and beyond.

“Areas of focus include, but are not limited to an exposition of the FIRS budgeting process; possible areas of legislative reforms and review of global best practices towards making taxation the pivot of national development.

The FIRS has also adopted various technology initiatives to promote innovation, convenience and transparency of its operations, “Thus, reducing the tax payers’ burden and every effort is made to improve FIRS efficiency in collections and tax administrations.”

In the last three years, the FIRS has raised the bar in technological initiatives for delivering services. Its core tax processes have been automated, leading to enhaced collection.

Some of these include automation of VAT collection in key sectors which will facilitate reduction in compliance cost in the long term andSystem to system integration between banks and FIRS, leading to 31% increase year on year in VAT collection in the banks that have gone live between Jan 2017- Dec 2018

FIRS’s Integrated Tax Administration System (ITAS) is helping a great deal to shore up tax collection. The ITAS project will enable the automation of FIRS tax processes. As part of the Service’s objectives to bring high-level efficiency to tax revenue collection and provide first class services to taxpayers, ITAS project introduced SIGTAS, a solution that covers all aspects of tax administration in one integrated system.

Another innovation under Fowler is the Government Information Financial Management Information System (GIFMIS), an interface linking FIRS to the OAGF for real-time exchange of information and data.

FIRS also introduced the State Offices of Accountant General Platform (SAG), which automated the deduction at source and remittance of VAT and WHT from state governments’ contract payments directly to FIRS’s account. About N13 billion was collected through this source last year. VAT collection is on a steady increase. In 2018, the FIRS collected N1.108 trillion. This surpassed that of 2016 (N828.19bn), and that of 2017 (N972.30bn). VAT has increased 25% since 2015.

Another technological initiative of the Fowler era, aimed at delivering quality services to tax payers, is the e-Services. Under this, e-Receipt was introduced. An electronic notification is automatically sent to the taxpayer’s email and/or phone within 24 hours after payment and its verification

Taxpayers can now request for and print their TCC from the comfort of their homes or offices. Tax clearance on the platform grew from 9,574 to 59,350 within a year of introducing the platform

An e-Stamp Duty payment system, integrated with CAC, was introduced, for easy stamp duty payments. Now, stamp duty can be paid with a few hours. With the automation of stamp duty payment, tax payers can handle transactions from the comfort of their homes or offices. When the platform went live the monthly stamp duty payments grew from an average of N500 million to N1.1 billion monthly.

Fowler remarks on the success of e-stamp duty: “E-Stamp duties collection is on a steady increase. In 2018, the FIRS collected N15.66 billion, which surpassed that of 2017 (N10.9bn), 2016 (N5.6bn).”

The Tax Amnesty programme initiated by the FIRS in 2016 helped to increase tax generation. It attracted over 3000 applications for waiver of interest and penalty. The programme resulted in the payment/collection of over N68 billion out of about N96.2 billion liability established from the exercise. Fowler indicated that waiver of penalty and interest were granted to ease tax burden and cost of enforcement on affected taxpayers.

The Voluntary Assets and Income Declaration (VAIDS) initiated by the Federal Ministry of Finance and the FIRS received over 5122 applications.The Scheme resulted in the voluntary declaration of over N92 billion liability with over N54 billion paid so far by companies.

As part of the deal to reduce pressure on tax payers, the FIRS allowed flexibility in the choice of tax office for taxpayers. This initiative by the Fowler administration allows taxpayers the choice of tax office through which to receive services from the FIRS. This is to facilitate voluntary compliance and improve ease of doing business by mitigating the costs and burden of tax compliance. A Federal Engagement and Enlightenment Tax Team (FEETT) and Contact Center, were also created for the purposes of improving taxpayer engagement and enlightenment.

The FIRS has been proactive engaging banks to enhance tax collection. In 2018, it wrote to all commercial banks, requesting for a list of companies, partnerships and enterprises with a banking turnover of N1 billion and above. This activity was aimed at ascertaining those companies complaint with tax laws and those that are not complaint. Last year, the FIRS generated about N21.75 billion from non-compliant organisations.

The FIRS under Fowler has clearly proved that Taxation is the most sustainable of all government revenue sources. He confidently remarks at a recent retreat: “There cannot be any serious discussion on diversification of the economy without reviewing the country’s tax regime for optimal performance. Between the resource persons we have invited; our own staff and our stakeholders, we hope to draw from a wide spectrum of perspectives on how best to move forward from here.

“If the way forward requires a review of existing legal frameworks or legislative reforms, there is no doubt in my mind that we have willing and able partners in the National Assembly of the Federal Republic of Nigeria; as well as the support of the FIRS Board and our colleagues at the Joint Tax Board.

“The FIRS shall continue to engage stakeholders especially the Legislative arm of government, in order to gain invaluable support in assenting to laws and policies that will drive tax compliance and increase revenue generation for national development. We believe that with that additional revenue, the state and federal governments would be able to provide more services and bring more development to Nigerians.”

The FIRS under the leadership of Fowler has evidently shown that it is capable of supporting governments at all levels through improved tax generation. With the 2019 tax generation target of N6 trillion, government at all levels can look forward to more cash to tackle pressing needs in 2019.

SHARE
Previous articleFirst Bank Pledges Increased Investment in Technology
Next articleNew CJN swears-in new election Petition Tribunals judges
Godwin Okafor is a Financial Journalist, Internet Social Entrepreneur and Founder of Naija247news Media Limited. He has over 16 years experience in financial journalism. His experience cuts across traditional and digital media. He started his journalism career at Business Day, Nigeria and founded Naija247news Media in 2010. Godwin holds a Bachelors degree in Industrial Relations and Personnel Management from the Lagos State University, Ojo, Lagos. He is an alumni of Lagos Business School and a Fellow of the University of Pennsylvania (Wharton Seminar for Business Journalists). Over the years, he has won a number of journalism awards. Godwin is the chairman of Emmerich Resources Limited, the publisher of Naija247news.

LEAVE A REPLY

Please enter your comment!
Please enter your name here

This site uses Akismet to reduce spam. Learn how your comment data is processed.