Federal Government’s financial safety nets are threatened as the Federal Inland Revenue Services (FIRS) revenue results for non-oil sector for the first quarter of 2014, show a continuous fall pegging at 25.08 percent.
According to the FIRS Q1 2014 revenue achievements, FIRS recorded a consistent revenue fall from January to March for non-oil sector, totalling N418 billion by end of March, against a target of N558 billion. This shows a revenue shortfall of N140 billion or 25.08 percent.
Kabir Mashi, acting executive chairman of FIRS, said in Owerri, Imo State, at the FIRS’ Regional Enlarged Management Meeting (REMM), that the non-oil tax collection also dropped from a January (2014) figure of N155 billion down to N133 billion in February (or 14.2%), while it further went down to N130 billion in March, a further 2.25 percent drop.
Mashi said the trend was quite worrisome, considering the Federal Government’s resolve “to raise non-oil revenue as means of making up any shortfall from oil revenue. Secondly, non-oil revenue is the basis upon which we are funded.”
He informed that a meeting called by Ngozi Okonjo-Iweala, minister of finance, had further given FIRS bigger target to realise at least N700 billion in April and May, of which N400 billion must come from the non-oil sector.
Meanwhile, the CME has called in McKinsey and Company, a global management consulting firm, to provide technical assistance to the FIRS in implementing a non-oil tax revenue capacity enhancement programme.
These would be based on eight key initiatives of: tax audit, arrears and debt enforcement, tax exemption, evasion of rental taxes, taxing high net worth transactions, registration, filing and utilising communication as a means of enhancing compliance.
The FIRS acting executive chairman said the agency hasd also undertaken a nationwide Value Added Tax (VAT) and Withholding Tax audits, which results he said had started coming in, saying “would bring in significant revenue.” He said the FIRS management was counting on all the field officers to deliver returns.
He told BusinessDay in an interview that the January – March tax period were often low in tax compliance, but would pick up by June, saying they would hold a town hall meeting at the end of the technical sessions, where all staff and co-ordinators would ask one another questions on what happened, and the way forward.
Giving a breakdown of regional performance, Bamidele Ajayi, the co-ordinating director, Field Operating Group of FIRS, said the field report showed that “we have not met our non-oil revenue target as at end of March, with a negative variance of 27 percent.”
Ajayi revealed that Onitsha, a commercial hub of Anambra State, surprisingly recorded only a 29 percent tax revenue in the Q1, collecting only N72.419 billion, against expected target of N246.663 billion, while Owerri, a mainly civil service capital of Imo State, made the highest non-oil revenue collection of N114.310 billion, surpassing its N104.062 billion target.
Anambra as a whole overshot its Government Business Tax (GBTO) target by 139 percent.
He said the minister had chided the tax agency as not doing well, saying they had assured her that FIRS would work harder to deliver the N700 billion to Federal Government by May.
BEN EGUZOZIE
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