The Executive Chairman of Federal Inland Revenue Service (FIRS), Mr. Muhammad Nami, on Monday advocated the need for aggregation of all revenues generated at national and sub-national levels for the purposes of ensuring accurate computation of Nigeria’s tax-to-GDP ratio and using the figures for planning and development.
The FIRS boss, made the call in his paper at a symposium organized by the FIRS, in collaboration with the Usman Danfodiyo University, Sokoto, with the theme ‘Taxation and challenges of external shocks: Lessons and policy options for Nigerians’ in Abuja.
Nami pointed out that low tax-to-GDP ratio was one of the recurring issues in Nigeria’s national discourse and stressed the need to comprehensively bring all the national and sub-national revenue sources into consideration in order to determine the contributions of revenue to yearly GDP rate.
According to him, the current basis for computation, which focused just on federal tax administration without considering the revenue generated by states, local governments, ministries, departments and agencies does not truly reflect correct tax-to-GDP ratio.
He disclosed that FIRS, through the Ministry of Finance, would henceforth include all governments’ revenues in accounting for taxes generated to give the correct state of governments revenue.
He listed the affected taxes generated to include amounts invested by taxpayers in the country’s road infrastructure as a result of Executive Order 007, tax waivers granted to pioneer companies, import and excise duties waived through the operations of the Nigeria Customs Service (NCS) and all other revenues generated by MDAs on behalf of the federal, state and local governments.
The FIRS chief pointed out that if measures he suggested were fully implemented, they would align Nigeria’s public finance system with global best practices in reporting and ensure a more transparent and accurate computation of the nation’s tax-to-GDP ratio.
Nami clarified: “The essence of this symposium cannot be over-emphasized given the challenges being experienced globally due to the COVID-19 pandemic.
“With the mutations and vaccine-resistant variants being discovered every now and then in some countries, we are yet to be free as the social and economic variables are still unpredictable.
“Therefore, the theme of this symposium is very timely and relevant as it considers policy options for addressing current and future challenges. It will also review the challenges of the informal sector which constitutes about 70 per cent of businesses in Nigeria and the reform options available to bring them into the tax net.
“Today’s event is significant because we are also using the opportunity to formally launch the FIRS contact centre. The decision to hold both events today is strategically intended to walk the talk. By launching the contact centre at this symposium, we are showing our commitment to not only hold talks on policy options in enhancing tax administration.
“By this we are also putting in place structures to actualize one of our key policy thrusts, which is to build a customer-centric FIRS through effective and efficient taxpayers services”, the tax administrator added.
