Babatunde Fowler, the chairman of Federal Inland Revenue Service (FIRS) has blamed the recession experienced by the Nigerian economy in 2016 as well as lower oil prices for the decline in the tax revenue collected by the agency between 2015 and 2018.
Fowler said this in response to the query issued to him by Abba Kyari, Chief of Staff to the President, requesting the FIRS Chairman to give reasons for the significant variances in revenue targets and actual collections.
“The low inflow of oil revenues for the period especially Petroleum Profit Tax (PPT) was due to fall in price of crude oil and reduction of crude oil production. Notwithstanding government efforts to diversify the economy, oil revenues remains (remain) an important component of total revenues accruable to the Federation,” Fowler said in a response statement.
According to Fowler, the price of crude oil fell from an average of $113.72, $110.98 and $100.40 per barrel in 2012, 2013 and 2014 to $52.65, $43.80 and $54.08 per barrel in 2015, 2016 and 2017 while there was also a reduction in crude oil production from 2.31mbpd, 2.18mbpd and 2.20mbpd in 2012, 2013 and 2014 to 2.12mbpd, 1.81mbpd and 1.88mbpd in 2015, 2016 and 2017 respectively.
“Furthermore, it is pertinent to note that when this administration came on board in August 2015, the target for the two major non-oil taxes were increased by 52percent for VAT and 45percent for CIT,” Fowler said.
Fowler explained that despite the challenges, non-oil revenue such as VAT and company income tax which he said are within the control of FIRS — have been on the increase compared to pre-2015 figures while oil-based taxes, such as petroleum profit tax (PPT), are beyond the control of the service.
Fowler, who is rounding off his four-year term as FIRS chairman amid speculations that he will not be re-appointed, explained in his response that non-oil tax revenue has actually been on the rise.
“Notwithstanding the increase, FIRS has in line with the Federal government’s revenue base diversification strategy has grown the non-oil tax collection by over N1.304 trillion (21percent) when the total non-oil tax collection for 2016-2018 is compared to that of 2012-2014.”
“I am confident that our current strategies and initiatives will improve revenue collection and meet the expectations of government,” Fowler concluded.
DIPO OLADEHINDE
