• Sunday, April 21, 2024
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FIRS outlines steps to achieve N19trn target

FIRS outlines steps to achieve N19trn target

The Federal Inland Revenue Service (FIRS) is banking on voluntary tax compliance and a new organisational structure, which it unveiled on Wednesday, to achieve its N19.4 trillion collection target for 2024.

This is as available figures show that the agency, which generates up to 70 percent of government revenues, recorded some N12.37 trillion as taxes in 2023, indicating an increase of over N2 trillion compared to the previous year.

Zacch Adedeji, FIRS executive chairman, spoke about the new structure and revenue performance at the 2024 strategic management retreat organised by the service in Abuja.

Read also: FIRS to leverage new structure, voluntary compliance to ramp up N19trn target – Adedeji

“We want to use the new structure to drive voluntary compliance, because the focus cannot be on litigation and investigation, those are one that will be for say for 10 percent of all our strategies,” he said.

“The real strategy is to drive voluntary compliance, and there will always be consequences for non-compliance and that is where this structure is going.”

Adedeji described the new organisational structure, set to kick off from February 2024, as a critical milestone to revolutionise tax administration in the country in a modernised and digitised manner.

He said the new era would be driven by a technology-based, customer-centric organisational structure designed to streamline processes and enhance efficiency in tax operations by ensuring that the evolving needs of taxpayers are met.

He said: “The structure advocates for a comprehensive approach to taxpayer services, consolidating our core functions and support under one umbrella. By tailoring our services to specific taxpayer segments, we aim to simplify the taxpayer experience. No more complexities, no more overlaps — just a seamless and user-friendly interaction for every taxpayer.

Read also: Customs, NPA, NCC to generate highest revenue in 2024

“In a groundbreaking move, we are shifting away from traditional tax categorisation. Instead of maintaining different departments for distinct tax categories, the new structure formulates taxpayer segments based on thresholds. This tailored approach ensures that taxpayers are guided and serviced according to their specific needs, eliminating confusion and redundancy in tax administration.”

He said due process would be employed in the reformation, highlighting the FIRS’ commitment to fostering a taxpayer-friendly environment that aligns with global best practices and positions Nigeria as a leader in contemporary tax administration.

Adedeji said taxes will not be raised but that emphasis would focus on “collecting better”, which the new structure also seeks to achieve.

Wale Edun, minister of finance and coordinating minister of the economy, who spoke at the event, commended FIRS’ improved revenue collections, but urged a transparent process that earns the public trust and citizens’ confidence to voluntarily abide by tax rules.

“You have done well,” he said. “What the general public and taxpayers want to see is that their money is faithfully collected, properly spent and accounted for with minimal waste and leakage. They deserve it and I believe you’ll give it to them.”

Edun reiterated that the emphasis of President Bola Tinubu-led administration is to grow the economy but will not resort to borrowing, given the elevated interest rates at the moment, but will rather drive internally generated revenue, domestic resource mobilisation and equity as opposed to debt.

Justifying the recent move to tap World bank’s $1.5 billion loan, the minister said the financing is concessionary, cheap and is particularly a seal of approval for the policies of the government, and will be deployed into specific projects in agriculture, education, health.

He said: “It is money that comes straight to the balance of payment to the government to spend in any given area of the economy.

“When you get that, it is a signal to the rest of the world that what you are doing is right and is to be supported by the international community. That is the real reward for seeking such financing.”

While he decried the country’s current tax to GDP at less than 10 percent, he challenged the FIRS to raise it in line with present tax policy which targets up to 18 percent in a few years from.

He, however, raised optimism that the FIRS will be able to surpass the target on the back of current reforms and new collection strategies being anticipated from the retreat.