•Omoigui-Okauru harps on need to reduce physical cash transactions
•FG’s governance app 90% ready, says Agba
James Emejo in Abuja
The Executive Chairman, Federal Inland Revenue Service (FIRS), Mr. Muhammad Nami, yesterday said the agency would henceforth ensure that all government revenues are included in the accounting for taxes generated and amounts invested by taxpayers in road infrastructure as a result of Executive Order 007 and tax waivers granted pioneer companies.
He also said import and exercise duties waived through the operations of the Nigeria Customs Service and all other revenues generated by Ministries, Departments and Agencies (MDAs) on behalf of the federal, state and local governments in the country would also be taken into consideration.
Nami, said the measures, when implemented would align the country with global best practice in reporting public finance and reflect a more transparent and accurate picture of the country’s tax-to-GDP ratio which is currently at six per cent.
This was just as a former FIRS Executive Chairman, Mrs. Ifueko Omoigui-Okauru, lamented that physical cash constituted the bulk of transactions in the country, calling on the government to further deepen electronic transactions for the sake of transparency in fiscal operations.
Also, Minister of State for Budget and National Planning, Prince Clem Agba, said the current administration accords great premium on citizens’ participation in governance, tracking service delivery and development in their communities.
To this end, Agba pointed out that in order to ensure transparency and accountability in the delivery of government’s capital projects countrywide, the budget and national planning arm of the ministry was working on a Web App –called the Eye Mark, to assist citizens to report on government’s projects and programmes earmarked for their communities using their mobile phones and in real time.
They all spoke at the opening of the national symposium on, “Taxation and Challenges of External Shocks: Lessons and Policy Options for Nigeria,” as well as formal launch of the FIRS Contact Center in Abuja.
The FIRS boss explained that for the country to achieve meaningful and sustainable growth in tax revenue, and minimise dependence on oil revenue, there was the need for continuous reform of the country’s operations and processes and human capital development, adoption of technology as well as the tax laws.
Nami also said Nigeria’s low tax-to-GDP ratio constituted one of the recurring issues in national discourse, adding that though the country needed to continually and conscientiously put measures in place to improve such concern, it also required to comprehensively bring all the national and sub-national revenue sources into consideration to properly and appropriately determine the correct and meaningful tax-to-GDP ratio for the country. He pointed out that the current basis for tax to GDP computation, which mostly focuses on the taxes administered at the federal level and leaving out other sources of revenue being generated by the federal, states and local governments and their MDAs, does not truly reflect its correct standing.
He said reforms remained crucial to the current Board and Management of FIRS, adding that the, “achievements we have recorded in improving and sustaining the revenue growth since 2020 to date irrespective of the challenges posed by the COVID-19 pandemic can be attributed to these reform initiatives.”
He stressed the need to strengthen collaboration among the tiers of government to enhance the certainty of the tax system and engender taxpayer confidence and compliance, stressing that the service would continue to provide leadership to the states through the Joint Tax Board (JTB) to re-position tax administration in Nigeria.
Speaking further, the FIRS boss said as a key stakeholder in the symposium, the agency would consider the ideas and strategies recommended at and incorporate them in its corporate plan from 2022 and beyond.
According to him, the essence of the symposium cannot be over-emphasised given the challenges being experienced globally due to the pandemic, expressing concern that the mutations and vaccine resistant variants being discovered every often in some countries, further indicated there is no respite yet as social and economic variables are still unpredictable.
He said the thematic areas for the symposium were carefully chosen to evaluate the reform options in tax administration and the lessons tax administrators could learn from other success stories as well as review the challenges of the informal sector which constitutes about 70 per cent of businesses in the country.
The symposium, organised in collaboration with the Usmanu Danfodiyo University, Sokoto (UDUS), also sought to assess the reform options available to bring the SMEs into the tax net.
He said, “Another area of consideration will be policy options to get the private sector involved in the critical infrastructure development in Nigeria.”
According to him, the launch of the contact centre demonstrated the FIRS commitment to not only hold talks on policy options in enhancing tax administration but also putting in place structures to actualise one of its key policy thrusts, which is to build a customer-centric FIRS through effective and efficient taxpayer service.
He explained that the centre was designed to help in bridging the communication gap between the taxpayers and the service and provide real-time platform for response to issues and resolution of challenges and concerns that may be raised by the resident and non-resident taxpayers without physically visiting our offices.
Agba, at the symposium, said the current administration accords great premium on citizens’ participation in governance, tracking service delivery and development in their communities.
He said in order to ensure transparency and accountability in the delivery of government’s capital projects countrywide, the budget and national planning arm of the ministry was working on a Web App –called the Eye Mark, to assist citizens to report on government’s projects and programmes earmarked for their communities using their mobile phones and in real time.
He said the application would soon be launched as it is about 90 per cent developed, stating that the government required the active participation in the process of tying budget provisions to projects and getting time value of money earmarked for capital projects as governance remained a collective responsibility by all citizens.
Agba, said the ministry would continue to support the FIRS and provide the enabling environment and policy direction to strengthen its operations.
The minister said taxation remained the surest and most sustainable source of government revenue and a potent tool for economic growth adding that that the federal government had continued to review its tax policy to bring it in line with current realities.
He said the fiscal initiatives in the annual Finance Act, prioritize non-oil sectors such as primary agriculture production, shipping and air transport, as well as financial and insurance services and grants tax breaks for MSMEs as well as enshrines fiscal discipline in Government Owned Enterprises (GOE) by limiting their cost- to-revenue ratio to a maximum of 50 per cent.
Agba, further pointed out that due to the uncertainty and unpredictability of oil prices in the international market, the government had continually placed a premium on the growth of the non-oil sector in the diversification of revenue sources.
He said, “I am glad to note that the FIRS non-oil tax collections for 2020 and the collections so far for 2021 is higher than the tax from oil. This can be attributed to the various reform programmes and digitization projects being undertaken by the Service to improve its operations. More is needed considering that we need to harness all sources in closing the budget deficit and reducing government borrowing.”
The minister, therefore, urged the FIRS to be consistent and focused in ensuring that current reforms are sustained.
Omoigui-Okauru, who was the guest speaker at the symposium, said cutting down on physical cash transaction would help track financial transactions for the purposes for effective taxation in the country.
She further stressed the need for the country to strengthen its fiscal buffers by building a resilient economy to withstand and overcome external vulnerabilities.
She said as long as public health challenges persist, external shocks had become inevitable, and called for adequate preparations on the part of government to contain it whenever it occurs.
Omoigui-Okauru, stressed the need to diversify the revenue base and build a resilient system, pointing out that the states could not afford to continue to depend on federal allocations for survival, stressing that dialogue was required in addressing the question over who collects tax revenues.
Among other things, she noted that the increasing insecurity and manpower gaps had limited tax yields in recent times adding that the development of a robust economy should be accorded every sense of urgency it requires.
The former FIRS boss, also called for integrated tax system and real stakeholder engagement as well as home-grown solutions to enhancing domestic non-oil revenue collections.
