.Targets N19.4tr in 2024

.Nigeria needs higher tax revenue-Finance Minister

.FIRS contributes 70% of total federation revenues-Acct Gen

The Federal Inland Revenue Service (FIRS) collected a record N12.374 trillion as tax revenue for the federation in 2023, surpassing the year’s target of N10.7 trillion.

The Federal Government has handed the agency a target of N19.4 trillion for 2024, a mark the chairman, Dr Zacch Adedeji, said is achievable with the emplacement of an effective tax collection system and ensuring a viable economic environment for businesses to prosper.

This was just as the Minister of Finance and Coordinating Minister of the Economy, Mr Wale Edun, commended Adedeji for surpassing the set target and tasked him on higher tax revenue in line with global trends.

Giving a breakdown of the figures, one of the agency’s coordinating directors, Mrs Amina Ado, said oil revenue accounted for N3.17trillion of the total takings, representing 25.6%, while non-oil revenue was 74.4% at N9.2trillion.

The initial tax target of N10.7 trillion for 2023 was reviewed upwards to N11.5 trillion by the agency in view of the exchange rate, indicating that actual collection was surpassed by N817billion.

A statement by Dare Adekanmbi, Special Adviser on Media to the FIRS chairman, said the disclosure was made at the opening of a two-day strategic management retreat of the agency held at the Congress Hall of Transcorp Hilton Hotel in Abuja, on Wednesday.

The statement said increase in non-oil tax revenue for 2023 as against previous years came as a result of improved efficiency in tax collection which saw the FIRS exceeding targets in tax types such as Company Income Tax, Value-Added Tax, Education Tax, Stamp Duties, Electronic Money Transfer Levy and others.

Answering a question of how realistic the 2024 target is, Adedeji said “What determines whatever we have comes from micro-economic indices because when the economy runs well, we are going to be taxing prosperity, not poverty.

“We will focus on the fruits and not the seeds. We need to ensure we have that viable economic environment that will lead to economic prosperity. And for us at FIRS, it is just to put the system in place to aid effective collection.

“We are not a revenue-generating agency, but a revenue-collection agency. With the plan of President Bola Tinubu to rejuvenate the economy, companies are going to grow and prosper,” he said.

Earlier in his opening remarks, Adedeji said the purpose of the retreat was to unveil to the directors in the agency the new roadmap that would drive an efficient tax administration.

“Today marks a historic moment as we unveil the new FIRS organizational structure, a critical milestone in our commitment to revolutionize tax administration in Nigeria.

“The cornerstone of this paradigm shift is the establishment of a customer-centric organizational structure designed to streamline processes and enhance efficiency in our tax operations.

“The new structure, set to kick off from February 2024, embodies our dedication to modernize and digitize the tax administration landscape in Nigeria.

“In our pursuit for a more efficient and contemporary tax administration methodology, we are embracing an integrated tax approach, leveraging technology at every step. This approach positions FIRS at the forefront of innovation, ensuring that we meet the evolving needs of our taxpayers in a rapidly changing world.

“By tailoring our services to specific taxpayer segments, we aim to simplify the taxpayer experience. No more complexities, no more overlaps—just a seamless and user-friendly interaction for every taxpayer.

“In a ground-breaking move, we are shifting away from traditional tax categorization. Instead of maintaining different departments for distinct tax categories, the new structure formulates taxpayer segments based on thresholds.

“This tailored approach ensures that taxpayers are guided and serviced according to their specific needs, eliminating confusion and redundancy in tax administration,” he said.

The Minister, in his goodwill message, called for increased tax revenue to enable the government to discharge its responsibilities to the citizenry.

“First of all, I commend the FIRS chairman and the rest of his team for coming together right from the beginning of the financial year to come to rub minds and put up a strategy for increasing tax revenue.

“Tax revenue in Nigeria is low. The collection level should be much higher as we have seen in other African countries not to talk of the developed countries. It is at 10 percent of the Gross Domestic Product (GDP) when at the highest level, it goes around 55 per cent.

“What the chairman and his team have done is build on already-established performance. In 2023, FIRS met his financial target and even surpassed it. But they need to do more.

“And that is what the chairman and his team will be discussing for the two days to make sure they finalize plans to substantially increase internally generated revenue.

In her own goodwill message, the Accountant-General of the Federation, Dr (Mrs) Oluwatoyin Madein, lauded the FIRS for contributing 70 per cent of the total revenues for the federation.

She, however, charged Dr Adedeji to challenge the status quo in his bid to increase tax revenue.

“We have seen a massive improvement in tax collection with the changes at FIRS over the years. The FIRS now contributes about 70% of the total federation revenues.

“Yet, a lot of tax revenues are left uncollected. The current tax base needs to be expanded while at the same time finding new and improved ways and means and “partnerships” that engender tax revenue growth.

“With strategic cooperation within FIRS and strategic partnerships, and by challenging the status quo, I am strongly convinced that FIRS can set a new standard for tax administration in Africa. If we continue to do business as usual, we continue to get the same level of results.

“This is my charge to the FIRS boss and all management staff – challenge the status quo!” she said.