Tax revenue to double in 12 months – FIRS

as Nigeria ranks 181 out of 189 economies in ease of paying taxes – PWC

The Federal Inland Revenue Service (FIRS) said Monday that tax revenue would double in the next 12 months if all stakeholders cooperate adequately.

The current petroleum profit tax is snout N1 trillion down from N3 trillion, while other taxes including Value Added Tax and company income tax increased slightly from N2 billion previously to N2.5 billion currently.

“If we all do what we should do, it will double in the next 12 months,” Babatunde Fowler, acting executive chairman, FIRS, said in Lagos at the PWC’s tax stakeholders event on the theme ‘the burden and benefits of tax compliance in Nigeria: managing the challenging landscape and preparing for the inevitable taxing times ahead.

Addressing the issue of paying tax without Tax Identification Number (TIN) he said the agency had opened a window whereby taxpayers without ID could make payment and the authority would follow up on that.

He expects to see in the first quarter of 2016 more number of taxpayers, to 5 million of individuals and half a million of corporate organisations.

Speaking at the event, Folarin Ogunsanwo, chairman, Lagos State Internal Revenue Service, said the state was working on having one simple assessment on collection of tax by local government and the state, saying very soon it would start the pilot scheme with Ikeja Local Government, and “once it succeeds, it will expand the scheme to the whole state.”

State authority intends to use technology to capture Alaba Market properly and assess their adequacy, he said.

Nigeria ranks 181 out of 189 economies covered by a survey on the ease of paying taxes. According to the latest edition of the paying taxes report from the World Bank and PWC, electronic tax filling and payments were the most common tax reforms undertaken by countries last year.

Consequently, paying taxes became easier for medium sized companies globally, and the focus has moved from reducing tax rates for companies to embracing technology and relieving their compliance burden. The report shows that low-income economies continue to face the biggest reform challenges.

It reveals further that on average the model company has a total tax rate of 40.8 percent of commercial profits, down by just 0.1-percentage point from last year.

“We have a long way to go simply because our tax to GDP is very low at about 8 percent, while worldwide including Africa is around 25 percent. If you are looking at moving from 8 percent to 25 percent that is 300 percent increase. So, we should not make the process of paying tax too complicated otherwise that does not support the objective we are trying to achieve,” Taiwo Oyedele, West Africa market tax leader for PWC, said while briefing the media after the forum.