FIRS Breaks All-time Record, Generates N5.3 Trillion In One Year

FIRS breaks all-time record, generates N5.3trn in one year

Federal Inland Revenue Service (FIRS) has broken Nigeria’s all-time record for revenue generation, after the agency generating N5.3 trillion in 2018.

FIRS highest revenue generation in Nigeria was previously recorded in 2012, when the agency generated N5.07 trillion.

FIRS chairman, Tunde Fowler, who announced the 2018 record revealed that the cost of collection as a percentage of actual taxes collected has been reducing, as the federal government is generating more at a period when oil prices are low.

“We have been steadily increasing revenue collection over the years while our cost of collection has actually been reducing,” Mr Fowler said. In 2016 we collected N3,307 trillion, in 2017 it increased to N4,027 trillion and in 2018 we collected N5,320 trillion.

Meanwhile, the cost of revenue collection as a percentage of actual taxes collected has been on steady decline; 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 progress in also increasing the amount of non-oil revenue it collects. According to him, 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 the diversification of the Nigerian economy and increasing Non-oil sources of revenue.”

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

Oil contribution of the N5.320 trillion is N2.467 trillion which is 46.38 percent, while non-oil element of the collection is N2.852 trillion which is 53.62 percent.

From audit alone, FIRS collected N212,792 billion from  2278 cases with a huge reduction in audit circle. Fowler said only companies that made a profit are obliged to pay taxes, adding that 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.

He noted that FIRS deployed ICT initiatives that makes it possible for a taxpayer to pay taxes from anywhere in the world, at any time, stating that the e-payment channel has ensured that Nigerians can pay taxes with the click of a button and also download their receipts online.

I am very happy to announce to you that we had a 31% increase year on year in VAT collection in the banking sector that have gone live between Jan 2017- Dec 2018 and collected N25bn so far. Amongst others, there is also the Government Information Financial Management Information System (GIFMIS), which create a link from FIRS to the Office of the Accountant General of the Federation (OAGF) for exchange of information and data.

We are also automating the payment of VAT by different 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, we collected 13bn. He also disclosed that taxpayers that requested for and processed their Tax Clearance Certificate, TCC through , from the comfort of their homes.

“Tax clearance on the platform increased from 9,574 – 59,350 within a year of introducing the platform. Auto VAT collection in key sectors has also facilitated in reducing the cost of compliance. VAT collection increased by 31% Between January, 2017 and December, 2018 which translates to a collection of N25 billion.  Overall, in 2019 VAT crossed the N1 trillion mark.

“VAT is the fastest growing type of tax in the world and even rich countries that did not depend on taxation have now introduced VAT, like the United Arab Emirates.

“The FIRS initiated a tax amnesty programme in 2016 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.

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