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

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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

Just in: Nigerian railway postpones resumption of Abuja-Kaduna train indefinitely

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The Nigerian Railway Corporation has postponed indefinitely the resumption of its suspended Abuja-Kaduna train service, following public outcry against the initial decision to return to operation next Monday May 23.
The service was suspended after terrorists on March 28 attacked a passenger train on that route, near Kaduna, killing eight people and abducting over 60 passengers, most of who are still in captivity.
The NRC had earlier in the week said the Federal Government had approved that train service should resume next Monday while efforts are being intensified to secure the release of those still held captive.

But relatives of the abducted by train passengers kicked against this, vowing to obstruct any train operation on the route without the release of their loved ones. Some option leaders also called on the government to rescind its decision to resume the train service.

A statement by the NRC Deputy Director Public Relations, Mahmoud Yakubu, on Friday evening announced a shift in the resumption date of the Abuja-Kaduna train and apologised for this.

It also said, “A new date will be announced soonest. The NRC will continue to cooperate and collaborate with the Federal Government in its uncompromising mandate of protecting the territorial integrity and the internal security of Nigeria for safeguarding the lives and properties of its citizens especially as it concerns the rail subsector.”

The corporation identified with relatives of those in captivity after the last train attack, adding that actions were being taken to secure their safe release.

It stated, “The Federal Government is alive to its

responsibility for the safe rescue of all persons being held hostage. We therefore appeal, particularly to the relatives of persons held hostage to be patient and cooperate with the corporation and the security agencies.”

 

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Lagos airport shut temporarily, flights diverted over mangled corpse on runway

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Muritala Muhammed Airports

The international wing of the Murtala Muhammed International Airport, Lagos, was temporarily shut in the early hours of Thursday after the mangled body of a dead man was found on Runway 18R of the nation’s flagship airport.

The identity of the corpse could not be ascertained as of press time. Also, it could not be established whether the dead man was knocked down by an aircraft taking off or landing on the runway.

However, airport officials told our correspondent that the runway was temporarily shut down while a team of officials from the Federal Airports Authority of Nigeria and the Nigeria Police Force evacuated the corpse from the runway.

During the temporary shutdown of the runway, international flights were prevented from landing and taking off from the airport’s international terminal.

Among the flights that could not land due to the shutdown was an Ethiopian Airlines flight 3907, a Boeing 77F aircraft with registration number ETAVN, which was coming from Lome, Togo to Lagos, Nigeria.

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The flight was later diverted back to Lome after holding for a while.

Airport officials said the corpse was suddenly found on Runway 18R during a routine runway inspection by FAAN personnel.

The spokesperson for FAAN, Mrs. Faithful Avokerie Hope-Ivbaz, could not immediately confirm the incident, saying she had yet to be briefed on the development.

Also, the Police Public Relations Officer, Airport Command, Mr Olayinka Ojelade, said he had yet to get the requited signal on the incident.

He promised to get back. As of the time of filing this report, he had yet to do so. However, a top police official at the MMIA confirmed the development.

He said the command was called upon in the early hours of Thursday to evacuate the corpse from Runway 18R.

According to him, the police are still investigating the identity of the dead man and how he got to the security area of the international airport.

However, an aviation security expert and former Military Commandant of the MMIA, Group Captain John Ojikutu,retd, said there was a need to investigate how the unidentified man found his way into the sensitive area of the airport, describing the incident as a major security breach.

According to him, the perimeter fence of the MMIA is not a security fence, adding that this has exposed the airport to various security breaches.

Ojikutu said, “The authorities need to investigate how the man got to the airport. Nobody can say much now; but he may have been knocked down by the wingspan or undercarriage of a jumbo jet but it is too early to say anything like that now.  But we need to examine the issue of houses that have been built too close to the Lagos airport. The rule says no building should be situated less than six metres to the airport structure or fence. However, we have seen cases of people crossing the runway before.

“The Nigerian Civil Aviation Authority and FAAN need to investigate this to ascertain what really happened. They need to find out the flights that landed before that incident. The current airport perimeter fence is not a security fence and we need to do something about it.”

Meanwhile, there have been a couple of airport security breaches in recent times.

A mishap was averted at the airside of the Murtala Muhammed Airport, Lagos some months ago when a speeding vehicle had a near collision with a Dana Air plane taxiing to take off on Runway 18L of the airport.

The unfortunate incident, which happened on December 21, 2021, occurred barely one week after a landing Max Air jet almost rammed into a malfunctioning car being tested on  Runway 18L.

Also, there was pandemonium at the airside of the Lagos airport on December 27, 2019 when an unidentified man found his way into the airside mysteriously and mounted a moving Air Peace plane.

The man was later arrested by security operatives who were notified by the pilot of a private jet coming behind the Air Peace plane.

The incident happened barely six months after a man found his way into the Lagos airport and climbed a Port Harcourt-bound Azman Airlines plane.

The man, believed to be mentally ill, was later identified as Usman Adamu from the Republic of Niger.

The Police said the Nigerien could not speak or understand English Language.

The authorities said then that investigation was still ongoing to ascertain how Adamu gained access to the restricted area at the airport.

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AutoTrends: Customs to reintroduce suspended e-valuation of vehicles Friday

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The Nigeria Customs Service (NCS) says it will reintroduce the suspended electronic valuation of vehicles on Friday.

The NCS said this in a letter dated May 17, 2022, and signed by Ajibola Odusany, NCS’ deputy controller, administration, on behalf of Yusuf Malanta, area controller in charge of the Apapa Command of the service.

Also known as vehicle inspection number (VIN), the policy has generated controversy since its introduction this year.

Clearing agents associations had protested against the e-valuation policy and grounded activities at the ports.

The freight forwarders said the e-valuation system sharply increased duty paid on imported vehicles.

This had forced the NCS to suspend the implementation of the VIN policy, following the intervention of the House of Representatives.

In bringing back the policy, the NCS said there would be a sensitisation programme for stakeholders in the clearance chain in preparation for the redeployment.

“In line with the planned nationwide deployment of the VIN Valuation on Friday, 20 May 2022, and the need to continually enhance the platform for optimal performance and service delivery, the sensitisation which is scheduled to take place on Thursday, May 19, 2022, at 11:00 am is to hold at the Apapa Command conference hall. The Deputy Controller Administration, A Y. Odusanya, on behalf of the Customs Area Controller requested that clearing agents should send their representatives to attend, saying the session would benefit everyone and further clarify any question,” the letter stated.

Acting President of Nigerian Licensed Customs Agents (ANLCA), Kayode Farinto, confirmed the development,

saying the association would speak after the training.

“We’re going for the training. So, we can’t say anything until we’re through with the training,” he said.

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