James Emejo in Abuja
The Executive Chairman, Federal Inland Revenue Service (FIRS), Mr. Tunde Fowler, has stated that 80 per cent of Nigeria’s revenue would come from the non-oil sector of the economy in the next three years.
Fowler, who spoke today at the Nigeria-Canada Investment Summit in Abuja, noted that the contribution of the non-oil sector to the Nigerian economy rose from 54 per cent in December 2018 to 60 per cent by November 2019.
He also noted that the continuous drop in the oil prices is a sign that attention should be focused on the non-oil sector of the economy.
“We are moving from oil dependent to non-oil dependent economy. We believe that in the next three years, the non-oil sector is going to contribute at least 80 per cent of the total revenue. You may ask where is that going to come from. It is going to come from Agriculture,” he said.
He said the strategies that FIRS is adopting to realise improved revenue collection are: “auto VAT Collection: there is automation of VAT collection in key sectors which facilitates reduction in compliance cost in the long term; there is system to system integration between banks and FIRS. VAT collection in the banking sector went live in January 2017. We have collected N25.6 billion from January to October 2019.
“Moreover, VAT collection in the Cable TV sector went live in December 2018 and generated N5.1billion so far from January to October 18, 2019.”
He explained that “Integrated Tax Administration System (ITAS) project is a suite of programs that enables the automation of FIRS tax processes. “As part of the service’s objectives to bring high-level efficiency to tax revenue collection and provide first class services to taxpayers, ITAS project introduced SIGTAS, a solution that covers all aspects of tax administration in one integrated system.
“Government Information Financial Management Information System (GIFMIS) is an interface linking FIRS to the Office of the Accountant General of the Federation (OAGF) for real-time exchange of information and data.
“State Offices of Accountant General Platform (SAG) has automated the deduction at source and remittance of VAT and WHT from State governments contract payments directly to FIRS’s account and so far collected N13 billion,” he said.
He noted that the deployment of online solutions is making tax administration more efficient, transparent and convenient.
Some of the FIRS services, which could now be accessed electronically, are taxpayer registration (through e-Registration); payment of stamp duties (through e-stamp duty); payment of taxes (through online payment: e-taxpay); receiving of electronic receipt after payment of taxes (throughe-Receipt); filing tax returns (through e-filing) and online Tax Clearance Certificates (TCC) through electronic Tax Clearance Certificate (e-TCC).
Fowler, who also spoke on various tax incentives in Nigeria, said Nigeria merited an award from the international scene on the number of reliefs and incentives it granted to both local and foreign businesses.
“Sometimes when I look at these tax incentives and reliefs, I feel that Nigeria is the Father Christmas. But that is necessary for the growth of the economy because they attract investors,” Fowler said.
He urged foreign investors to consider Nigeria as their first option because of attractive tax incentives and reliefs and attractive end-price.
Fowler pointed out that there are attractive tax incentives and reliefs in Personal Income Tax Act, Companies Income Tax Act, Capital Gains Tax Act, Value Added Tax Act, agriculture and foreign investment.
Fowler said that the following tax reliefs were provided by the Personal Income Tax Act (PITA). “There is Tax Credit Allowance. Tax credit allowable against tax payable on income derived from outside Nigeria if brought into the country through government approved channels;
“Consolidated Relief Allowance, Section 33 (1) of PITA allows a relief allowance of N200,000 subject to a minimum tax of one percent of gross income whichever is higher, with the balance taxable in accordance with the income table in the Sixth schedule to PITA,” Fowler said.
Furthermore, section 43 of PITA provided that no return of income should be filed by a person whose only source of income in any year of assessment was employment in which he earned N30,000 or less from that source..