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FIRS Records Record Breaking N5tr Revenue In 2018

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The Federal Inland Revenue Service (FIRS) has announced  that it is on course to generate the highest revenue in the nation’s history.

Naija News  learnt that the commission has generated N5 trillion by the second week of December 2018, and is at the verge of making N5.3 trillion at the end of the year.

The Executive Chairman of FIRS, Babatunde Fowler, who made the announcement in Lagos at a retreat tagged “Parliamentary Support for Effective Taxation of the Digital Economy” said the FIRS is targeting N8 trillion for 2019.

The FIRS in a statement said the N5.320 trillion collection is the highest revenue ever generated by FIRS in history as the highest in FIRS was N5.07 trillion generated in 2012.

“FIRS’ generation of N5.3 trillion is significant as it was at a period when oil prices averaged $70 per barrel,” the statement read. “Oil price was at an average of $100 to $120 per barrel between 2010 and 2013.

“Non-Oil component of the N5.320 trillion is N2.467 trillion (53.62 per cent), while oil element of the collection is N2.852 trillion (46.38 per cent. From audit alone, FIRS collected N212,792 billion from 2278 cases with a huge reduction in audit circle.”

The statement quoted Mr Fowler as saying the cost of revenue collection has also reduced.

He said: “While we have been steadily increasing revenue collection over the years, our cost of collection has actually been going down. In 2016 we collected N3,307 trillion, in 2017 we collected N4,027 trillion and in 2018 we collected N5,320 trillion. Meanwhile, the cost of collection as a percentage of actual taxes collected has been reducing; in 2016 it was 2.6%, in 2017 it was 2.49% while in 2018 it was 2.14%.

“The Service has been making tremendous efforts in also increasing the amount of non-oil revenue it collects. Non-oil collection has contributed 64.99% in 2016, in 2017 it contributed 62.25% and in 2018 it contributed 53.62%. This represents the government’s focus on increasing non-oil sources of revenue and the diversification of the Nigerian economy.”

The FIRS boss reiterated the fact that only companies that made a profit are obliged to pay taxes. According to him, if a company is situated in Nigeria, it is only fair that it pays its fair share of tax for the benefit of all Nigerians.

The Executive Chairman also stated that various initiatives were implemented by FIRS to enhance tax administration and make taxation as easy as possible.

He said FIRS deployed ICT initiatives that enable a taxpayer to pay taxes from anywhere in the world, at any time. With the e-payment channel, one can pay taxes with the click of a button and one can also download their receipts. Other e-Services deployed are the e-Registration, e-Filing, -Stamp Duty and e-Tax Clearance Certificate.

“Taxpayers can now also choose the tax office where they would like to conduct their tax transactions,” he said. “Before now, if one was registered with a particular tax office, one had to conduct all of their tax transactions in that office. However, to make it more convenient for the taxpayer, they can now choose which ever office they wish to conduct their transactions with.”

Mr Fowler also noted that Nigerian taxpayers are embracing the modern way of tax collection, introduced by the FIRS through the 6-e Solutions.

He said: “We are automating the collection of Value Added Tax, VAT in key sectors which will facilitate reduction in compliance cost in the long term. We are doing System to system integration between banks and FIRS. And I am happy to announce to you that we had a 31 per cent increase year on year in VAT collection in the banks that have gone live between Jan 2017- Dec 2018 and collected 25 billion so far.

“Amongst others, there is also the Government Information Financial Management Information System (GIFMIS), which links FIRS to the Office of the Accountant General of the Federation OAGF for real-time exchange of information and data. We are also automating the payment of VAT by states through the State Offices of Accountant General Platform (SAG). This will ensure that we automate and deduct at source and remittance of VAT and WHT from State governments contract payments directly to FIRS’s account and so far, collected13bn.”

Speaking further, the FIRS boss disclosed that taxpayers requested for and processed their Tax Clearance Certificate, TCC through tcc.firs.gov.ng, from the comfort of their homes.

“Tax clearance on the platform grew from 9,574 – 59,350 within a year of introducing the platform,” he said.

“Auto VAT collection in key sectors has also facilitated in reducing the cost of compliance. Between January, 2017 and December, 2018 VAT collection increased by 31% which translates to a collection of N25 billion. Overall, in 2019 VAT crossed the N1 trillion mark. Indeed, VAT is the fastest growing tax type in the world and even rich countries that did not depend on taxation have now introduced VAT, like the United Arab Emirates.

“In 2016 FIRS initiated a tax amnesty programme which attracted over 3000 applications for waiver of interest and penalties. The programme resulted in payment of over N68 billion out of about N96.2 billion liability established by the exercise.”

On the Voluntary Assets and Income Declaration Scheme (VAIDS), he said the FIRS received over 5122 applications under the Scheme. The Scheme resulted in voluntary declarations of over N92 billion, with over N54 billion paid so far by companies, he added.

Mr Fowler also explained how FIRS ascertained whether those companies with banking turnover of N1 billion are tax compliant or not.

He said, “FIRS wrote to all commercial banks in May 2018, 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 that are compliant with the tax laws and those that are not compliant. So far, non-compliant organisations have paid about N21.75 billion.

“Companies that had a Tax Identification Number (TIN) and were paying were 45261, those that had a TIN but were not paying were 40611 and those without a TIN and who were not paying were 34504.”

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