Udora Orizu in Abuja
The House of Representatives Committee on Finance yesterday queried the Chairman of the Federal Inland Revenue Service (FIRS), Mohammed Nami, over an observed increase in the recurrent expenditure as well as the inability to meet the N5 trillion target it proposed in 2020.
Members of the committee raised the concerns during the 2020 budget defence and consideration of the agency’s proposed 2021 Revenue and Expenditure Estimates.
The committee, chaired by Hon. James Faleke, queried the astronomical increase in various expenditures incurred during the period under review.
The lawmakers also raised concerns on the projected non-oil cost of collection of 4 percent, which is accrued to FIRS in 2020 and worth N137.411 billion.
They also sought to know the rationale behind the proposed 7 percent cost of collection worth N298.411 billion for 2021.
While responding, the FIRS Chairman, Nami, said that they realised the sum of N4.95 trillion against the N5.077 trillion in the revised 2020 budget.
He said the agency would have done better in 2020 if not for the COVID-19 lockdown and the #EndSARS protest that rocked the country.
Nami explained that the agency could not do tax drive, and businesses were also closed for about four months.
He said they also suspended tax audit and investigation for about six months, because they couldn’t visit tax payers nor carry out enforcement activities to recover back debts.
On the overhead increasing astronomically, Nami said the increase was due to full provision in the 2021 budget for 1,800 staff recruited by the immediate-past management, and that little they added in 2019 and 2020.
He also said they carried out promotion exercise in order to deal with promotion arrears in 2019 and 2020, and in so doing, about 5,000 staff members were promoted, which means more cost for them to carter.
According to him, ‘’And if you have more staff, surely their salary will go up, taxes that you’re going to pay on their behalf will go up, the National Housing Fund contribution and PENCOM contribution will go up. For those promoted, you have to implement a new salary regime for them. There’s also the issue of inflation and exchange rate differential.
‘’There’s lockdown effect on businesses, implementation directive also for us to study, and research best practices on tax administration which involve traveling to overseas, and we also have to expand and create offices more in rural areas to get closer to the tax payers; we pay rent for those offices and this could be the reason why all these things went up.”
Earlier in his presentation, Nami, told the committee that the agency is targeting N5.900 trillion revenue for the country in 2021, which represents a 16.22 percent increase above the corresponding year’s budget.
Nami further said there will be a marginal reduction in the taxable income of tax payers due to the effect of COVID-19 pandemic.
He also disclosed that the agency would not be recruiting any staff in the year 2021 as there are not enough accommodation yet even for existing staff in the face COVID-19 social distancing rules, adding that presently, some of the staff are working remotely from home.