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FIRS Raked in Unprecedented N10.1tn Tax Revenues in 2022

Oil and non-oil taxes contributed 41%, and 59%, respectively. 


•N1.81 trillion in tax waivers impinged on collections

•Laments political interests, multiple tax authorities hampering revenue drive 

•Buhari hails achievement

James Emejo in Abuja

Executive Chairman of Federal Inland Revenue Service (FIRS), Mr. Muhammad Nami, yesterday, disclosed that N10.1 trillion was generated as tax revenues by the service in 2022.

The figure represents the highest tax collection ever recorded in the history of the service and any other revenue agency in the country. But it falls short of the N10.44 trillion target for the year under review.

Speaking to journalists after presenting the FIRS 2022 Performance Update to President Muhammadu Buhari in Abuja, Nami emphasised that it was the first time the service would cross the N10 trillion mark in tax revenue collection. He said the service would have surpassed its projection for 2022, but for the various tax incentives granted under the respective laws, which amounted to N1.81 trillion. He added that this was not part of the total tax receipt for the year under review.

Nami also said political interest and distractions, including litigations against the service, hindered its tax collection drive last year.

He said, “We would have actually done better, but for several issues, some of which are political and very sensitive to discuss in the public domain.

“But the most important one is distractions from certain interests within the federal government itself and the sub-nationals or people who want to do what FIRS is doing – in other words, those that want to perform the statutory functions of FIRS of assessing, collecting, and accounting for taxes in Nigeria.”

The FIRS chairman added, “These are not just mere issues but people instituting legal actions against FIRS to further distract us. People instituting, even federal agencies instituting legal actions against laws that have been passed by the National Assembly and signed into law by Mr. President.

“So, these challenges impacted negatively, because you see on so many occasions people writing in to find out that ‘tax A, we are confused, we don’t know who to pay to now that there’s a court ruling to restrict you from collecting such taxes’. So, this really impacted negatively on what we did last year.”

Nami urged the three tiers of government to apply the funds generated by the service to critical sectors of the economy in order to “give value back to taxpayers as far as their monies are concerned”.

He stated, “We appeal to them to continue to invest the little we are generating judiciously so that they are able to encourage taxpayers to continue to comply and pay more so that together we are able to fix Nigeria.”

He added that if well-managed, the tax revenues should “address the issue of constant borrowing by the three tiers of government to fund their budgetary requirements”.

Nami stressed the need for the three tiers of government to discuss the possibility of harmonising the country’s tax system. He said the global best practice was to have a single tax authority with a single technology to drive tax administration.

Nami argued that a multiple tax system would only help people to dodge tax payments, stressing that harmonisation would help boost tax receipts in the interest of the economy.

He explained that of the total tax receipts for 2022, oil taxes amounted to N4.09 trillion or 41 per cent of total collections, while non-oil taxes accounted for N5.96 trillion or 59 per cent of taxes collected last year.

The report showed that Companies Income Tax (CIT) accounted for N2.83 trillion of the total collections, while Value Added Tax (VAT) totalled N2.51 trillion, Electronic Money Transfer Levy stood at N125.67 billion, and N353.69 billion came from Earmarked Taxes.

The report further stated that the total value of certificates issued by FIRS to private investors and Nigerian National Petroleum Company (NNPC) Limited for road infrastructure under the Road Infrastructure Development Refurbishment Investment Tax Credit Scheme, created by Executive Order No. 007 of 2019, amounted to N146.27 billion.

Nami further attributed the historic tax performance to the “dogged implementation of strategic reforms over the past two years; a renewed commitment by officers of the service, accompanied with a boosted morale, as well as the innovative deployment of technology for automation of both tax administration and operational processes.”

He said, “This collection was possible through collaboration with our stakeholders, from our colleagues at the executive branch of government to the members of the judiciary, to our brothers and sisters at the National Assembly as well as the tax advisory committee, professional bodies, unions, and, most crucially, our taxpayers.”

Nami said FIRS would build on the current reforms, achieve full automation, and continue to establish a resilient service that would continue to provide sustainable tax revenue to fund the government.

He added, “We intend to maintain, and even improve on the momentum in 2023. We have peaked, but this is not certainly our peak. In fact, my hope is that this would be the least sum the service would ever collect going forward.

“Our goal is to identify more areas where we can improve on in the delivery and efficiency of our collection, and plug loopholes, while deploying innovative reforms in data and artificial intelligence.”

The FIRS boss also said, “Ultimately, we believe that the FIRS can shoulder the responsibility of providing the revenue needed for the governments across the federation to cater to the needs of the Nigerian people through taxes.

“This is feasible once we get the much-desired support from the three tiers and arms of government, as well as all stakeholders.”

He commended Buhari for his support, as well as Minister of Finance, Budget and National Planning, Mrs. Zainab Ahmed, and Minister of State for Budget and National Planning, Mr. Clem Agba.

Nami also praised all patriotic taxpayers who paid their taxes correctly, stakeholders for their support, and officers of the service for their dedication to duty.

This is the second consecutive year that FIRS would be recording unprecedented tax collection.

In 2021, the service achieved a record tax collection of N6.41 trillion, representing over 100 percent of its collection target for the year, and it was the first time the service crossed the N6 trillion mark.

Buhari hailed FIRS under Nami for the feat so far recorded in tax collection. He urged the agency to sustain the achievement and do more to enable the tiers of government to pay salaries and meet other obligations to citizens, including infrastructure and equipping security agencies to protect life and property.

ThisDay Newspapers

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