The Federal Inland Revenue Service, FIRS, has recorded an all-time high tax revenue collection of N5.23 trillion in 2018, with Value Added Tax, VAT, at N1.11 trillion for the first time, even as it set a target of N8 trillion for the new year.
Prior to 2018, the highest revenue figure ever attained by FIRS was N5.07 trillion, in 2012, when oil price hovered around $100-$120 per barrel, but the latest development is more remarkable given that it was achieved when oil prices averaged $70 per barrel.
The Chairman of FIRS, Dr. Babatunde Fowler, who made the disclosure during the 2019 Management and Stakeholders Retreat, in Lagos, Sunday, said the N8 trillion target is being finalised, but assured of the readiness of the agency to take it as a challenge.
He stated that the cost of collection as a percentage of actual taxes collected has been reducing, as the government is generating more at a time when oil prices are low.
According to Fowler, “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.”
Fowler, who reiterated the need for increased compliance to tax laws, said there would not be any serious discussion on diversification of the economy without reviewing the country’s tax regime for optimal performance.
While commending the Service on the feat achieved, the Chairman, House of Representatives Committee on Finance, Babangida Ibrahim pledged the lawmakers’ support for every initiative that would lead to efficient tax system in the country.
“The taxation of any economy and growth of policies of government depends largely on the revenue generated by the tax authorities. We agree that to achieve effective taxation, the support of the parliament cannot be over-emphasised,” he said.