Federal Inland Revenue Service Targets N3.87 Trillion From VAT, CIT 2016
The Federal Inland Revenue Service, FIRS, hopes to earn N3.87 trillion from Value Added Tax, VAT and Companies Income Tax, CIT this year, Executive Chairman, Tunde Fowler said yesterday.
The N3.87 trillion from VAT and CIT will be 78.42 per cent of the N4.957 trillion tax revenue targeted for 2016.
Fowler spoke yesterday at the 2016 Annual Corporate Strategy Retreat of the FIRS, where he noted that he was not very happy with FIRS’ 2015 collection of N3.73 trillion against the revenue target of N4.57 trillion.
“The above target is clearly unacceptable and not a reflection of our capacity. I am particularly not pleased with the very poor VAT collection, which based on my previous experience at the state level in the administration of a tax similar to VAT, should be a high yield and easy to collect tax.
“Even the relatively good performance for CIT is buoyed by the fact that an initiative directly overseen by my office in the last three months of 2015 accounted for a collection of over N122 billion, without which the performance for CIT would have been less than 85 %.
“Against this backdrop, in 2016, we do not have the luxury of not meeting our targets especially as Government is looking to non-oil taxes to bridge the revenue gap.
“In this regard, we have proposed a revenue target of N4.957 trillion for 2016. This target is largely dependent on non-oil collection and in particular, VAT will account for N2 trillion (40.35% of the total target) and CIT is expected to account for N1.877 trillion (37.87 %) of the total target. “Between these targets are expected to provide almost 80 per cent of our collection in 2016. We therefore have our work cut out and there is no room for complacency.
Fowler noted that dwindling oil receipts, provide FIRS with a window to diversify the nation’s revenue base away from oil. He said FIRS will employ a blend of carrot (volountary compliance) and stick (enforcement) to ensure FIRS attains its goal of 90 per cent compliance this year.
FIRS, he said, is collaborating with State Governments, tax consultants, major audit firms, stakeholders in the federal system, including the National Assembly.
He said the tax agency is undertaking a nationwide value Added Tax and Witholding Tax Monitoring and nationwide taxpayer registration exercise anchored by the FIRS Federal Engagement and Enlightenment Tax Teams, (FEETT).
Said the FIRS chairman: “these efforts have started to yield results as 361,451 new corporate taxpayers have been registered within the last three months, while our target is 500,000 new corporate taxpayers by the end of the first quarter of this year.
At the same event, Minister of Budget and National Planning, Mr Udoma Udo Udoma, said that the Ministry would collaborate with the Federal Inland Revenue Service (FIRS) in order to enhance non-oil revenue collection.
Udoma stated that the present administration was ready to provide the needed support for increase tax revenue collection, but noted FIRS is expected to work with other relevant bodies, including the States and Local Government tax authorities to facilitate the process of collection and compliance of tax registration and collection.
Udoma, represented by Mrs. Nana Fatima, Permanent Secretary of the Ministry said that the Ministry would use the Joint Planning Board (JPB), National Council on Development Planning (NCDP) and National Economic Council (NEC) to support Ministries Departments and Agencies (MDAs)
“To ensure effective implementation of the plan, adequate and sustainable would be required. The FIRS and other revenue generating agencies will therefore have important role to play.
“The Ministry of Budget and National Planning, she said, is ready to collaborate with the FIRS in designing strategies for enhancing non-oil revenues for the country.
“I want to also assure you that the current administration is committed to providing the necessary political leadership and support to facilitate increase tax revenue productivity in the country’’.
According to him, it is our expectation that he (Fowler) will bring to bear his wealth of experience for the Lagos State to enhance revenue collection in the country.
Minister of the Federal Capital Territory, FCT, Muhammed Musa Bello, Accountant General of the Federation, Ahmed Idris, Chairman Senate Committee on Finance, Senator John Owan Enoh and Deputy House Committee on Finance Hon. Austin Chukwurah emphasised the primal role FIRS will play in providing revenue towards realising Federal Governments’ plan for 2016.
Representatives of key accounting and tax audit firms: KPMG, Ernest Young, Akintola Williams and Delloite, PEDABO, FITC Consulting, PriceWaterHouse Cooper suggested how FIRS could be innovative, increase tax yield, expand tax base and encourage taxpayers to pay their taxes happily.
Head, Communication & Servicom Department
TAGS Accountant General of the FederationAkintola Williams and DelloiteCommunication & Servicom DepartmentFCTFITC ConsultingKPMGMuhammed Musa BelloPEDABOWahab Gbadamosi Head