Economy Politics

FIRS Blames Tax waivers, illicit financial flows for low revenue

FIRS targets N620bn in January, gets only N338.1bn revenue
Written by Maritime First

…As Senate President tasks revenue generating agencies to set targets for performance***

The Federal Inland Revenue Service (FIRS) says non-discretionary tax waiver grants, illicit financial flows abroad and high overhead costs are responsible for not meeting revenue targets in recent times.

The service made this known in a statement by its Director, Communications and Liaison Department, Mr Abdullahi Ismaila, in Abuja on Thursday; just as Senate President, Ahmad Lawan, asked revenue generation agencies to set measurable targets for their performance.

The statement disclosed that the Executive Chairman of FIRS, Mr Muhammad Nami, gave the insight on Thursday at a Senate interactive session with revenue generating agencies aimed to improve the Internally Henerated Revenue (IGR) of the Federal Government through non-oil revenue sources.

It quoted Nami as saying: “Nigeria loses a lot of revenue through tax waivers granted to big companies which otherwise would have been taxed to buoy up government revenue.

“Also, illicit financial flow is a major cause of revenue loss to Nigeria. Coupled with this, is the operational cost of the FIRS which is also high compared to the statutory provisions for the running of the organisation.

“I am new in the FIRS but upon my assumption of office, I have discovered that these, among other factors, contributed to making the FIRS unable to meet its target in recent times.”

The chairman however canvassed better official discretion in granting tax waivers, even as he assured that he was working hard in collaboration with relevant government agencies to stem illicit financial flow, especially via profit shifting by multinationals operating in the country.

The FIRS boss urged the National Assembly to assist the FIRS in this regard in order to increase government revenue towards the modernisation of public infrastructure in the country.

In the meantime, the  Senate President, Ahmad Lawan, on Thursday asked revenue generation agencies to set measurable targets for their performance.

Lawan made the call while declaring open the maiden meeting of the Senate committee on Finance with heads of revenue generation agencies of government.

He said Nigeria’s problem was how to generate and remit revenue to the government’s treasury.

“We have very massive, noble and laudable projects lined up as a government and as an administration but the critical factor of revenue is militating against the realisation of some of these projects.

“Infact, Nigeria has to go out to borrow to fund some of these projects. But we believe that we can do better in terms of revenue generation and collection.

“We believe that in addition to the oil sector, those non-oil sector revenue generation agencies can meet their targets and even do better than the targets,” Lawan said.

The Senate President said the meeting which would hold every quarter was not intended as a probe or investigation but simply to enhance their capacity to perform.

“We want to see where we need to do more legislative intervention and give some supports including incentives.

“Every agency that is revenue generating should have a target. We have asked the minister of finance to furnish us with the targets set by the ministry in conjunction with the agencies.

Also read:  FIRS inaugurates intelligence system to track tax evaders

“And we are going to work towards the realisation and actualisation of those targets. Where we are able to meet the targets, I think we should aim for higher targets.

“Where we are not able to meet the targets, we should find out why we are not able to meet those targets.

“Is it something that requires immediate legislative intervention to resolve the problem or the challenge? Or is the policy that is now becoming an ecumberance.

“What we intend to do is to ensure that there are no ecumberances. Revenue generation agencies should have no ecumberances.

“Where you have one, don’t waste time, we will provide legislative intervention required as fast, as expeditious as possible because time is of essence.

“Nigerians have given us four years. We have already gone beyond half of first year. We made so many promises to Nigerians.

“We want to provide better security, better infrastructure, better economy. An economy that will work for everyone. Both those who are at the top and especially those who are at the lower level.

“Those students who walk the streets. Those people who would graduate and have no jobs should have jobs. Or at least should have hope that jobs would be there.”

Lawan said the quarterly engagement is basically to ascertain what the relevant agencies are able to accomplish in terms of revenue generation, collection and remittance.

“What have you been able to achieve in terms of revenue generation. How much has gone to the covers of the Federal Government. What are our challenges.

“This is not a probe. This is not an investigation. Its just to enhance your capacity, your ability and your drive to do your work and discharge your mandate,” Lawan said.

Chairman of the Senate committee on Finance, Sen.Solomon Olamilekan Adeola(APC Lagos) said the meeting was to set the framework for carrying out the oversight function with a view to adequately fund the 2020 budget

“It is our belief that the Federal Government revenue from non-oil and oil revenue sources can be greatly improved upon through strict adherence to the Fiscal responsibility Act 2007,

“The operation of the Treasury Single Account, broadening of the tax net and compliance with section 162 of the 1999 Constitution of the Federal Republic of Nigeria as amended,” Adeola said.

 

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Maritime First