Tax now accounts for 70% of Nigeria’s revenue – FIRS - Newstrends
Connect with us

Business

Tax now accounts for 70% of Nigeria’s revenue – FIRS

Published

on

The Federal Inland Revenue Service (FIRS) has said receipts from tax now account for about 70 per cent of Nigeria’s total revenue.
The FIRS said other revenue lines, including oil, accounted for just 30 per cent of the country’s revenue.

Executive Chairman of FIRS, Muhammad Nami, disclosed this recently in Abuja when he made a presentation titled, “Weathering Economic Turbulence,” at an interactive session with stakeholders.

Nami called for the amendment of the country’s tax laws, saying most of them date back to pre-independence times.

He stressed that the country’s revenue situation was very dire, explaining that Nigeria has always relied on oil revenue for its budgetary needs, with little regard for revenue from tax.

He said the fall in oil prices, reduction of production quota, and oil theft had reduced the country’s revenue to critical levels.

The FIRS head revealed that the total Federation Account revenue for June 2020 was just N696 billion (about $2 billion), “which is equivalent to what a county in the United States spends.”

He said, “Nigerian economy is projected to contract by over five per cent in 2020 due to COVID-19 and other disruptions. Oil prices have plummeted (from $97.98 in 2012 to below $50 in 2020).”

He said despite efforts by the FIRS and Nigeria Customs Service (NCS) to drive up Value Added Tax (VAT) receipts, “Collection has indeed gone up, but Nigeria’s VAT gap remained at a pitiable 70 per cent, compared with South Africa at 12 per cent, Morocco at 28 per cent, and Zimbabwe at 38 per cent.”

Nami reiterated that Nigeria’s tax-to-Gross Domestic Product (GDP) ratio was currently about six per cent, compared to Egypt at 15 per cent, Ghana and Kenya at 17 per cent, and South Africa at 28 per cent.

The World Bank recommends a minimum of 15 per cent Tax to GDP ratio for economic growth and poverty reduction, he stated.

Nami stated, “A Debt Management Office (DMO) report indicates that about N1.21 trillion was used to service debt from January to June 2020.

“Over N3 trillion is proposed for debt servicing in 2021. The report further projects that Nigeria’s debt stock will grow significantly by end of 2020.

“God forbid that Nigeria should default in debt repayment obligations. Nigeria’s debt to revenue ratio is worsening – it is estimated at 538 per cent at the end of the fourth quarter, that is 190 per cent increase from 2019 figure (348%).”

Nami identified the problems of tax administration in the country to include the false belief that Nigeria is rich and does not require tax money, resistance to tax payment and tax being seen as an unnecessary burden, and lack of political action to tackle low level of tax payment.

He lamented that Nigeria was a mono-product economy and the whole economy revolved around crude oil. Thus, a slight change in oil price shakes the whole economy and jeopardises welfare, he said.

Nami stated that the widespread destructions that took place when the recent #ENDSARS protests were hijacked by hoodlums would have negative consequences for the country.

He said every effort should be made to improve domestic revenue mobilisation in view of the dwindling oil prices to prevent the country from falling into a debt crisis.

The FIRS boss said a debt crisis would exacerbate insecurity and political unrest in the country, and might also derail the programmes of the federal government.

In order to raise the country’s revenue performance, Nami charged all stakeholders with a clear political mandate to tackle low levels of tax payment and ensure simpler tax systems with limited number of rates and exemptions.

He suggested a reform of indirect taxes on goods and services, and called for the deployment of new technology and large data capabilities, and adoption of risk-based tax audits and examinations.

According to him, in response to the present revenue crunch, the FIRS has improved its administrative processes, carried out proper staff placement, restored staff-management relations, embarked on strategic capacity building for enhanced performance, and employed technology for improved service delivery

Similarly, the agency, Nami said, has disengaged its “Tax Audit Contractors,” decentralised tax audit and tax investigation functions, and enhanced stakeholder collaboration.

He said FIRS had also improved communication with taxpayers, made strategic moves to enhance revenue from indirect taxes, harmonised all tax provisions scattered in different laws, and restructured tax incentives for maximum benefit. He said the agency treated the issue of low tax payment as a national emergency deserving support from all stakeholders through political and legislative interventions.

Nami said FIRS had blocked tax loopholes and made more money available to the government.

-THISDAY

Railway

Lagos-Ibadan rail to get three more trains as NRC opens two new stations

Published

on

Lagos-Ibadan rail to get four more trains as NRC opens two new stations

The Nigerian Railway Corporation will soon increase the daily train trips on the Lagos-Ibadan standard gauge rail line from two to six.
Railway District Manager (RDM) for Lagos, Augustine Arisa, an engineer, disclosed this in an interview with some select journalists including NewsTrends reporter.

He said four more trains, two each from Lagos and Ibadan, would be added as soon as ongoing work on the telecommunication facility was completed. The facility will ensure smooth communication and between the train driver and the control tower.
Arisa spoke just as the corporation has opened for operation two recently completed train stations along the route, Ijoko and Papalanto.
The RDM said, “We currently run two return trips on Lagos-Ibadan standard gauge line. I want to run six trains daily when the telecommunication facility is fully ready.
“I also want to move more containers from the port. This will no doubt positively affect the prices of goods in the market.
“It’s a lot of trailers that will be taken off the road. In the long run, it makes the products being carried cheaper for the final consumers/ buyers
“The double issue of accumulated demurrage and port congestion will also be solved with the evacuation of cargoes by rail. It saves the importer the cost of demurrage and ultimately makes the goods cheaper.”
He also spoke on the measure being taken to reduce the cost of moving containerised goods from Apapa port, Lagos, to Ibadan, Oyo State, following complaints by importers and customs agents.
Already, he said the Managing Director of the NRC, Fidet Okhiria, (an engineer), had set up a committee to review the container haulage rate in order to make it competitive and attractive to more people.
He said, “When the issue came to us, the MD immediately called a meeting and set up a committee to review the situation.
“All over the world, people complain of double handling.”
“On the complaint, we are expecting the report of the committee for a possible downward review of the freight rate,” Arisa added.
Meanwhile, the corporation has officially inaugurated the Ijoko and Papalanto train stations.
The report of the opening was obtained by NewsTrends from the NRC website on Tuesday.
This is therefore good news for people hoping to board or drop the train at these stations.
Before now, the train only stopped at Agege, Abeokuta and Omi Adio after taking off from Mobolaji Johnson Station in Lagos or Obafemi Awolowo Station in Ibadan.

Continue Reading

Auto

Excitement as Jetour Steals the Show at Abuja Motor Fair

Published

on

Excitement as Jetour Steals the Show at Abuja Motor Fair

Jetour, the new kid on the block in the Nigerian auto market, is currently making waves in its debut at the ongoing Abuja Motor Fair.
Jetour’s beautifully decorated pavillion and its array of new vehicles
were one of the major attractions at the auto event holding at the International Conference Centre, Abuja.
Most visitors to the fair since Monday December 4, 2023 when the fair arena was open, were held spellbound by the aesthetics and unique designs of all the new Jetour models on display.
On parade within the brand’s enclosed stand are X70 Liberty, X-70 Plus Elegance, X-90 Cruise, and Dashing, all sport utility vehicles.
Members of the National Assembly are expected to have a full view of the Jetour dashing beauty on wheels at the assembly complex in Abuja next week where the brand of vehicles will be showcased.
After the official opening ceremony of the Abuja Auto Fair on Tuesday, the special guests including a representative of the Director General of the NADDC Joseph Osanipin had the opportunity to visit each vehicle’s stand at the fair.
The NADDC DG representative could not resist the urge to feel one of the Jetour models X70 Plus Elegance as he stepped into the driver’s seat.
He marvelled at the dazzling dashboard and other features of the resplendent interior.
Obviously impressed by what he saw inside and outside the vehicle, he said, “This is beautiful.”


All the models boasting advanced technologies, comfort and creative designs have kept people at the auto show amazed, especially going by their affordable prices.
Jetour, one of China’s most revered auto brands and launched by Chery Holding Group in 2018, has scored many firsts in China where competition is really high in the auto sector.
According to Jetour’s representative in Nigeria, Jetour Mobility Services, “Jetour Automobile is a new brand launched by Chery Holdings in response to the market trend and consumer demand.
Jetour says its focus is to be a leader in mobility as well as provide reasonable travel solutions for individuals and families.
It has set a goal of providing an excellent vehicles that demonstrate individuality for today’s young people.

Continue Reading

Business

Stakeholders seek Islamic financing for primary healthcare

Published

on

Stakeholders seek Islamic financing for primary healthcare

Finance and healthcare experts have called for the utilisation of Islamic financing as an alternative funding source for primary healthcare in Nigeria.

They made the call yesterday in Abuja during a one-day international summit organised by the Africa Islamic Economic Foundation and the Duke Logistics and Consult Limited with the support of the Development Research and Projects Centre (dRPC).

The summit brought together, participants from the Islamic Development Bank, academics, the business community and technology firms on telemedicine, among others.

It was themed ‘Harnessing Innovative Sources of Financing Primary Healthcare Infrastructural Development in Nigeria.’

READ ALSO:

A former Kano State governor, Senator Ibrahim Shekarau, who chaired the summit, said that investing in digital health technology through the instrument of Islamic financing would not only bridge the gaps in healthcare delivery in Nigeria but also improve access, reduce geographical barriers, and enhance the quality of healthcare services.

He said it would also seamlessly provide specialised healthcare for Nigerians regardless of their social status.

Dr Stanley Ukpai said there was a need for Nigeria to review its dependence on budget as the only source of healthcare financing.

He called on stakeholders at the summit to find alternative funding sources to diversify the domestic funding sources for health.

The president of the African Islamic Economic Foundation, Malam Baba Yunus Muhammad, said accessibility to quality primary healthcare remained a significant hurdle, especially in remote areas, adding that digital technology and Islamic finance could play a pivotal role in revolutionising healthcare infrastructural development.

Stakeholders seek Islamic financing for primary healthcare

Continue Reading

Trending

Skip to content