Babatunde Fowler, Chairman Federal Inland Revenue Service (FIRS) and Joint Tax Board has disclosed that at least 10 million individuals from the informal sector of Nigerian economy will be dragged into tax net before the end of the year, saying Joint Tax Board is putting strategies in place to ensure Nigerians pay taxes.
Fowler, who chaired the 135th Meeting of the Joint Tax Board hosted by Ogun State Internal Revenue Service (OGIRS) in Abeokuta on Monday, lamented that statistics shows that 37.5 million individuals operate small and medium-scale businesses in the country but only 10 millions were captured in the tax net.
He said, “Actually some of the taxes are seasonal and also we are putting strategies in place to make sure everyone pays their taxes as and when due.
“Over the last six months or so, we have added close to 700,000 corporate accounts, and among ourselves as members of the Joint Tax Board which also includes State Boards of Internal Revenue, we have put ourselves under heavy pressure to make sure that we bring more people into the tax net.
“Also, we have exchanged information between the Federal Inland Revenue Service and all the State Boards of Internal Revenue to make sure that everyone who is on a tax database of a state is also on our tax database and we have also given them information about our own tax payers.”
While revealing that Ogun State Internal Revenue Service (OGIRS) remains the best in terms of revenue generation from taxes by recording 50% growth in its internally-generated revenue, the Chairman of FIRS added, “Let me break that down into sectors.
“We have the individual in the informal sector and we also have corporate account. Now, I will give you a little idea of the position within the informal sector.
“Those in the small scale business areas claim they have over 37.5 million members. What we have on our database nationwide, as individuals, is only 10 million. That shows you there is about 27.5 million individuals who are not paying taxes.
“But we also have small enterprises, small businesses that are not paying taxes. But among ourselves as members of Joint Tax Board, all the states chairmen have agreed to add a minimum of 10 million individuals before December 31st.
“So, we are going round the whole nation preaching the word, hoping that people realise that we cannot continue to rely on oil revenue. That we have to chip in to make sure that Nigeria continues to improve.”
However, Governor Ibikunle Amosun canvassed a review of the sharing formula of revenues accruing to the federation account through non-oil taxes including Value Added Tax (VAT), explaining that “the non-oil revenue sharing formula currently in use is obsolete.
The host governor added, “As at the time it was done 20 years ago, Ogun State, for instance was way back because of the number of industries we had then. Today, Ogun State is the industrial capital of Nigeria. The sharing formula should reflect this new reality. This is derivation in another form.”
“It is a good thing that for the first time in the life of this administration, non-oil receipt accounted for over 70 percent of the fund shared at the last FAAC. It is a commendable and a welcome development because it signifies a major shift in focus from oil to non-oil revenue.
“But in the same token, I think it is very expedient to ask that we cast a second look at the formula we use in sharing the proceed from these non-oil revenue.
If we make a lot of money from industries, we should also remember that these companies reside in a state and they put enormous pressure on the environment and the roads in those states.
“Those various state governments carry the can and pick the bill for cleaning the environment. It is therefore only good for the management of RMFAC to give more back to those states hosting these companies.”
The Ogun State governor also used the opportunity to challenge the management of the Joint Tax Board (JTB), which includes chairmen of 36 states Internal Revenue Services, representatives of the Revenue Mobilisation and Fiscal Allocation Commission (RMFAC), the Nigerian Customs Service and the Immigration Service, to “device creative strategies” for ensuring that more wealthy Nigerians are brought into the national tax bracket.
“The rich and wealthy don’t pay taxes and even when they do, they underpay. They make a lot of money but don’t pay anything or don’t pay the requisite tax. We all go to other advanced nations and see that these wealthy people don’t escape the way they do here. So the challenge for the JTB is to correct this. You must think out of the box to achieve this,” Governor Amosun said.
