Economist Hails FIRS over Cost-cutting Reforms

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

Esther Oluku

A seasoned economist and retired director in the federal civil service, Dr. Aina Iluyomade, has urged the Chairman of the Federal Inland Revenue Service (FIRS), Mr. Babatunde Fowler, to sustain the agency’s cost-cutting reforms in order to boost revenue and enable the federal government meet the 2019 budget expectations.

Recent World Bank reports had downplayed the economic prospects of Third World countries, particularly mineral-dependent economies in this financial year.

But speaking in Lagos on the sidelines of a recent national workshop on the revenue and growth opportunities in the telecom sector, Iluyomade noted that the steady increase in Nigeria’s tax revenue in the past three years was an indication that the Nigerian economy is equipped to withstand whatever shock from the international commodity market.

From the N3.3trillion revenue in 2016 to N4 trillion generated in 2017, the FIRS netted over N5.3trillion in 2018.

While the contribution from oil tax averaged less than 40 per cent, non-oil taxes accounted for 60 per cent during the period under review.

Analyzing FIRS’ performance, Iluyomade attributed the improvement in revenue generation to adoption of modern ICT solutions to drive operations even while introducing drastic measures to cut down on the costs of tax collections.

“Whatever it is worth, one must appreciate the innovation made by Fowler at the FIRS since he took over. At a time of economic contraction caused by a severe recession experienced by the country in 2015, it is a thing of a miracle that the service has been able to nearly double revenue in the past three years,” Iluyomade explained.

According to him, the sweeping reforms introduced at the FIRS, include automation through the electronic tax pay solution, a self-service channel available on all commercial banks internet banking platforms aimed at complementing the existing manual method.

The former top bureaucrat, whose autobiography will soon be presented, also cited aggressive cut-cutting measures in operations as a factor responsible for the steady increase.

“My finding is that the cost of chasing revenue has been cut down drastically by Fowler. You know before he came on board, the practice was to release lump sum of money for hundreds of offices maintained by FIRS across the federation in the name of operations monthly.

“What did they mean by operations? It is a cost the head of such branches have discretion over to buy diesel and petrol. But that still did not stop reports of inefficiency in such stations as some outstation officials were citing lack of diesel to power generators in the office and lack of fuel in their operational cars as the reason they were not meeting revenue target.

“So, being a sensible man, what Fowler did was to first of all cut down that monthly impress before putting in place a system to completely eliminate such abuse and enhance cost efficiency. Before long, the FIRS management introduced a voucher system by which operational vehicles go to designated filling stations for petrol across the federation and sign off vouchers which are now submitted to FIRS for payment directly at the end of the month. Same thing was done to the supply of diesel. Before you knew it, the abuse stopped and productivity improved. Operation costs fell by more than 60 per cent.

“The good news is that many of the tax board at the state level have started keying into the template set by FIRS to boost their own revenue.”

Iluyomade’s forthcoming book which chronicles his 30 years odyssey in the federal civil service is due for public presentation soon.