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Market Digest Nigeria

Finance

FIRS generates N4.9trn, meets 98% revenue target in 2020

 The Federal Inland Revenue Service (FIRS) said its total tax revenue in the year 2020 amounted to N4,952,243,711,728.37.

firs

The service explained that the landmark achievement represents approximately 98% of the national tax target of N5.076 trillion set for the FIRS by the federal government.

This was disclosed by Muhammad Nami, the Executive Chairman of FIRS during a press conference on Tuesday in Abuja.

Nami pointed out that the near 100% collection feat was remarkable in view of the debilitating effects of COVID-19 on the Nigerian economy; the all-time low price of crude oil in the international market; business disruptions and lootings during the #EndSars protests.

The FIRS boss also stressed that the feat was possible despite the generous tax waivers granted by the service to ease the impact of the COVID-19 shutdown; additional tax exemptions granted to small companies in the 2019 Finance Act and insecurity in some parts of the country.

Nami noted that the service recorded the feat at a time when the price of oil hit an all-time low.

“In other words, oil which used to contribute over 50% in tax returns through the Petroleum Profits Tax in previous years, accounted for only 30.6% contribution to the tax revenue generated in 2020. The non-oil tax collection was 109% in 2020, 9% higher than the previous year,” Nami asserted.

The executive chairman attributed the FIRS revenue generation success in 2020 to a number of reforms initiated by the board and management of the service under his leadership.

He said the reforms included capacity building for members of the staff; improved staff welfare package; promotion and proper placement of staff; deployment of appropriate technology for tax operations; segmentation of taxpayers to ease tax compliance; and continuous collaboration with relevant stakeholders, among others.

Nami further commended the conscientious taxpayers in the country and dedicated members of staff of the FIRS nationwide for their support and devotion to work, which he said made it possible despite the numerous obstacles encountered by the service in 2020.

According to him, “the FIRS is optimistic this current fiscal year 2021 will be better than 2020. We shall perform exceedingly well given that our service reforms are expected to yield greater dividends, especially as different parts of tax administration are being automated.

“We are also optimistic that exploration activities will improve in the oil sector and increase the prospect of higher tax revenue from the sector. Similarly, the ongoing reforms by the service together with increased stakeholder collaborations will brighten the prospect of improved voluntary compliance and consequently higher tax revenue generation for the country this year and beyond.”

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