The Presidency has given the Chairman of the Federal Inland Revenue Services (FIRS), Babatunde Fowler till Monday, August 19 to respond to its query on poor revenue collection and remittance.
The query was contained in a letter issued by Abba Kyari, President Buhari’s Chief of Staff to Fowler who had consistently claimed the FIRS surpassed its revenue target for some consecutive years now.
Fowler had announced some tax revenue of N5.32 trillion in 2018, the highest since 2012 when the agency generated N5.07 trillion.
Marked as ‘restricted’, the letter which was issued on August 8, 2019 was titled “Budgeted FIRS Collections and actual collections” and centred on poor revenue collections and remittance between 2015 and 2018.
It reads: “Your attached letter FIRS/EC/ECW/0249/19/027 dated 26 July 2019) on the above subject matter refers.
“We observed significant variances between the budgeted collections and actual collections for the period 2015 to 2018. Accordingly, you are kindly invited to submit a comprehensive variance analysis explaining the reasons for the variances between budgeted and actual collections for each main tax item for each of the years 2015 to 2018.
“Further more, we observed that the actual collections for the period 2015 to 2017 were significantly lower worse than what was collected between 2012 and 2014. Accordingly, you are kindly to explain the reason for the poor collections.
“You are kindly invited to respond by 19 August 2019.”
Fowler, a close ally of the All Progressives Congress (APC) Chieftain, Bola Tinubu would be due for reappointment in a few months, having been appointed by President Buhari in 2015.
Those who know say the new controversy may take a take a toll on his reappointment bid.
The FIRS targets N8 trillion revenue target for 2019 but had earlier in the year claimed it collected N5.32 trillion in 2018, the highest revenue receipt since 2012 when it realised N5.07 trillion.
Fowler notes the N5.3 trillion revenue for last year as significant, coming at a period when oil prices averaged $70 per barrel.
The non-oil component of the N5.320 trillion was N2.467 trillion representing 53.62 per cent of the total collection, while the oil component was estimated at N2.852 trillion or 46.38 per cent.
The FIRS, he said collected N212,792 billion in audit from 2,278 cases with a huge reduction in audit circle.
Though the FIRS had steadily raised collections over the years, cost of collection has actually been going down.
“In 2016, we collected N3,307 trillion, in 2017 we collected N4,027 trillion and in 2018 we collected N5,320 trillion.
“Meanwhile, the cost of collection as a percentage of actual taxes collected has been reducing; in 2016 it was 2.6 per cent, in 2017 it was 2.49 per cent, while in 2018 it was 2.14 per cent,” he had noted, and assured the service has been making tremendous efforts in also increasing the amount of non-oil revenue it collects.
Non-oil collection has contributed 64.99 per cent in 2016; 62.25 per cent in 2017 and in 2018 it contributed 53.62 per cent.
“This represents the government’s focus on increasing non-oil sources of revenue and the diversification of the Nigerian economy,” Fowler had noted.
Meanwhile Fowler sees the possibility of the agency expanding the country’s tax base by over 100 percent to 45 million before the end of Q3 2019, a target which would hopefully expand the country’s low tax revenues.
Nigeria’s has a low tax base currently put at about 20 million with its tax to GDP one of the world’s lowest at 7 percent, according to official figures.
