The Federal Inland Revenue Service (FIRS) says it collected N4.122 trillion from January to October 2020 out of a target of N8.5 trillion for the current year.
The Service is, however, hopeful it will surpass the N5.26 trillion it collected in 2019, despite the Covid-19 pandemic and economic downturn in 2020.
FIRS said non-oil taxes amounted to N2.79 trillion while oil-based taxes fetched N1.332 trillion in the period under review.
Ezra Zubairu, coordinating director of FIRS, who represented the chairman, Mohammed Nami, at the 2020 annual TETFUND retreat and joint interactive forum with FIRS and stakeholders in Port Harcourt, Rivers State, on Tuesday to review progress and focus on 2021, said several measures have been deployed to boost revenue collection in Nigeria.
FIRS, which collected N5.26trn in 2019, equivalent to 59.8 percent of the target of N8.80trn for that year, had said non-oil collection was rising fast. In 2019, it was N3.15trn or 70 percent of the target. For petroleum profit tax, the ratio was just 49.1 percent. These figures are all gross.
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Kashim Ibrahim Imam, TETFUND board of trustees (BOT) chairman, had demanded for N500bn collection from FIRS for 2021, saying it was possible especially if the informal sector is captured in the 2 percent education trust fund (EDT) being collected solely by the FIRS. The TETFUND target for 2020 is N277bn, but FIRS said it had collected N251bn by end of October, hopeful it would meet target.
Zubairu, speaking on ‘New Thrust In Achieving EDT Target in Covid-19 Pandemic Era: A Stakeholders Approach’, said the Service was using new strategies to meet target despite Covid-19 pandemic and EndSARS matters.
He said the FIRS was also giving palliatives such as granting taxpayers up to December 2020 for filing and waivers on fines and interests. He said some old debts were also being waived.
The coordinating director supported the tax waiver to SMEs with N25m turnover, saying it makes huge sense because it costs huge funds and energy to pursue small payers.
He said it was a global practice to focus on the 20 percent of taxpayers that bring in 90 percent of the revenue.
Zubairu mentioned major challenges affecting volume of tax revenue as large size of informal sector, saying a lot of businesses are not captured. He said whereas Nigeria is said to have about 7 million SMEs, only about 2 million are registered with the Corporate Affairs Commission (CAC).
The other critical challenge he mentioned is how to track what he called complex business structures of multinationals that strive to avoid taxes. He, however, said the Service is collaborating with some groups mostly abroad to track the companies.
He talked about huge cash transactions by companies to avoid detection and therefore avoid tax. The coordinator said many companies hide their addresses and when you get to the known addresses of the portfolio companies, they end up being residential address.
The FIRS mentioned several initiatives being put in place including setting up platforms, use of e-systems to reduce human contact, e-filing systems, harnessing the mining sector, incentives to bring out compliance, etc. The informal sector holds huge attraction in the coming years, the Service said.
