FG Hits N5.320 tn Tax Revenue Target in 2018

0
Executive Chairman of the Federal Inland Revenue Service (FIRS), Mr. Babatunde Fowler,

Nume Ekeghe

The Executive Chairman, Federal Inland Revenue Services (FIRS), Mr. Babatunde Fowler, has disclosed that the agency recorded its highest tax collection of N5.320 trillion in 2018.

Fowler had disclosed that FIRS generated N5 trillion in the second week of December 2018 with a target to hit N5.3 trillion revenue at the end of last year.

He had also added that if the agency succeeded in pooling the N5.3 trillion revenue, it would mark the highest revenue ever generated by the agency in history as the highest in FIRS history was the N5.07 trillion generated in 2012.

Speaking yesterday at the opening ceremony of an FIRS stakeholders’ retreat in Lagos, Fowler said the N5.320 trillion was the highest since the creation of the FIRS.

According to him, the federal government has set a target of N8 trillion for 2019.

He added that the agency through its various reforms and efficiencies in tax collections, was able to enhance its Value Added Tax (VAT) in 2018, which also exceeded the N1 trillion mark.

Comparing the 2018 revenue collection with that of the previous year, he said: “We collected a total of N5.320.52 trillion, which was an increase of N1.292 trillion over the collection of 2017, making it the highest in the history of the Federal Inland Revenue.

“We also collected four per cent in terms of cost of collection, but only for non-oil revenue collected. On all revenue collections, we do not get any commission and we have been able to make sure that our services are more efficient and convenient to tax payers.

“In actual figures, in 2016, we collected N3.3 trillion, 2017 was N4.027 trillion and in 2018, we realised N5.320 trillion. We are also quite aware that our focus has to be on non-oil revenue and in the past three years, when you look at the percentages in terms of contribution of oil tax revenue, in 2015 non-oil contribution to tax revenue accounted for 65 per cent, in 2017 it was 62.5 per cent and in 2018 it was 53.62 per cent.

“So, certainly, our non-oil tax revenue is growing in absolute figures, from 2016 to 2018. In 2016 it was N2.149 trillion, in 2017 it was N2.5 trillion and in 2018 N2.85 trillion.

“That does not mean we have left behind the oil tax revenue; it has improved from N1.5 trillion in 2016 to N1.52 trillion to N2. 467 trillion in 2018.”

Also speaking on the target set by the federal government, he said the federal government set a target of N8 trillion for FIRS to fund the 2019 budget.

He assured his audience that the FIRS would work towards achieving the target.

Fowler added: “The 2019 budget has not been approved but we hear in the corridors of power that the target for FIRS is in the region of N8 trillion. And with their support and the support of all tax payers, we believe it is achievable.”

In terms of the cost of tax collection in the country, he said the agency has been able to reduce the cost drastically.

“In 2016 it was 2.6 per cent, in 2017 it was 2.49 per cent and in 2018, it was 2.14 per cent, meaning that our cost of actual cost of collection is heading downwards based on the efficiency and technology we deployed to tax collection,” he explained.

He added, “In the area of VAT, in 2018, we crossed N1 trillion mark. VAT has been on the growth and is basically the fastest tax type in the world. In 2016, we collected N828 billion, 2017 it was N972 billion and in 2018 it was N1.1 trillion.

“It is however important to note that 85 per cent of this VAT is distributed among the state governments. So we like to request the state government in partnership to continue to assist us in collecting on their behalf.”

“Moving forward, certainly I believe the world and Nigeria we understand that taxation is the most sustainable source of revenue to all governments.

“So, basically as we continue to perform this service to the nation and as federal government continues to diversify the economy and clearly from the tax payments we can see that the non-oil sector has shown improvement in terms of profitability which has transmitted into higher tax payments.”