Nigeria earned N35tn from tax in eight years — FIRS

Within an eight-year period covering 2011 and 2018, the country earned a total of N35.56tn as tax revenue, statistics obtained from the Federal Inland Revenue Service have revealed. An analysis of the tax revenue statistics showed that the tax income was earned in two major tax revenue items.

They are oil tax which is generated through the Petroleum Profit Tax and non-oil tax which is generated from seven tax revenue components. They are Company Income Tax, Gas Income, Capital Gains Tax, Stamp Duty, Value Added Tax, Education Tax and Nigeria Information Technology Development Fund. An analysis of the N35.56tn tax collection showed that about N17.97tn was earned during the eight-year period from Petroleum Profit Tax. This represents about 50.53 per cent of the entire revenue generated during the eight-year period. From non-oil tax, the federation earned about N17.59tn which is about 49.47 per cent of the tax revenue for the period under review. Further analysis of the non-oil tax revenue showed that a huge chunk of the collection was made through Companies Income Tax. Revenue from this tax component during the period was estimated at N8.75tn representing about 49.74per cent of the non-oil revenue tax collections. This was followed by VAT revenue collection with N6.68tn. The revenue from VAT accounted for 37.98 per cent of the N17.59 non-oil revenue. From education tax, N1.58tn was collected, accounting for about 8.98 per cent of the total non-oil revenue. Other collections were gas income N256.5bn which accounted for about 3.15 per cent of non-oil tax revenue, Capital Gains Tax N174.5bn, Stamp Duty N78.18bn and National Information Technology Development Fund N74.51bn. Further analysis of the tax revenue for the eight-year period showed that the sum of N4.63tn was earned in 2011 while 2012, 2013, and 2014 fiscal periods recorded tax revenue of N5.01tn, N4.81tn and N4.71tn respectively. The nation earned N3.74tn in 2015; N3.31tn in 2016 and N4.03tn in 2017 while 2018 recorded tax collection of N5.32tn. Findings showed that since 2016, non-oil tax collection had been on a steady rise owing to a combination of measures adopted by the government to boost tax collection. It was gathered that the FIRS came up with various technology-driven initiatives aimed at increasing the number of taxpayers, and reducing taxpayers’ burden by making tax payment more convenient. Some of them included 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. Other initiatives were the deployment of electronic payment channels for registration, filing, payment, receipt and tax clearance certificate to facilitate easy remittance of taxes by taxpayers. The service also came up with information exchange for third party databases which was implemented in collaboration with government agencies such as the Nigeria Customs Service and the Corporate Affairs Commission among others. Since the implementation of the reforms, the number of registered tax payers had increased from 10 million in 2015 to about 19 million in 2018 with the figure estimated to hit 45 million tax payers soon. The Executive Chairman, Federal Inland Revenue Service, Mr Babatunde Fowler, had said that the service would this year surpass the N5.3tn revenue generated in the 2018 fiscal period. Fowler said that the service had embarked on series of reforms aimed at making it easier for taxpayers to pay their taxes. He said that the reforms had started yielding results as the service was able to generate its highest ever tax revenue in 2018. The FIRS boss explained that while huge revenue could be generated from oil; such revenue was not sustainable due to the volatile nature of crude oil prices. Fowler said that the government recognised the importance of non-oil revenue to economic development, adding that this was why the service was being positioned to generate adequate tax revenue for distribution by the three tiers of government. He said, “We did record some improvements last year as we made the sum of N5.3tn which is the highest in the history of the service. “But it’s not about the money but on what it can do. Many people believe that if we are generating so much money, then the Federal Government budget has no problem being funded.


Source: Punch