The Senate has advised the Federal Inland Revenue Service (FIRS) to strive for N30 trillion revenue collection in the fiscal year 2024, thereby raising the N19.7 trillion target earlier set for the tax agency.
The Senate Finance Committee, during its budget presentation for 2024, advised the Service to strive to meet the projection after a critical review of the current tax waiver policies, which it lamented had constituted a source of huge loss to the government, estimated to be about N17 trillion over the past five years.
Expressing its serious concern about the current fiscal waivers, the Committee pointed out that the regime was susceptible to abuses and partly responsible for the revenue leakages in the tax system.
To reverse the ugly development and shore up the revenues, the Chairman of the Senate Finance Committee, Sen. Sani Musa, underscored the imperative for FIRS to overhaul the current tax waiver policies.
The lawmaker said: “Your projection of N19 trillion as total tax collection for 2024 is good when compared to N11.16 trillion achieved in 2023 but the senate believes that you can do more even to the tune of N30 trillion if required measures are put in place.
“As impressive and encouraging the performance and projections of FIRS are, under your leadership, this committee and by extension, the Senate, on a serious note, urge you to look at the direction of tax waivers largely being abused with attendant and avoidable losses being incurred on yearly basis.
“Available records show that within the last five years, about N17 trillion have been lost by the country to tax waivers. It should be suspended and possibly substituted with a rebating system”, he added.
In his presentation during the plenary at the Red Chamber of the National Assembly, the Executive Chairman of FIRS, Dr. Zacch Adedeji, expressed concerns over a proposed N2.7 trillion tax credit for road construction and strongly advocated for a stay of the allocation until the full utilisation of the existing N2.5 trillion allocation. T
He said: “Regarding tax credit, what I said was that the programme is laudable but that the N2.5 trillion being spent on it by NNPCL should be exhausted before bringing a fresh request.
“N2.7 trillion fresh request being made should not be entertained because all NNPC revenue should not be spent on roads when the Ministry of Works is there.
“President Bola Tinubu has seen the issue of multiple taxation as a pool of problems. That is why he set up the presidential committee on tax reforms and fiscal policy. As of today in Nigeria, we have 62 types of taxes being collected. The sad news about that is that less than eight out of the entire 62, accounted for 97% of the collection.
“We are already consulting and engaging the state government on it. At the end of the day, we won’t have more than eight or nine taxes that the state and federal government would be collecting”, the tax expert added.
A cursory appraisal of the performance of the federal tax agency over the past years showed that it had consistently improved its revenue collection profiles through the adoption of technologies and capacity-building initiatives for its workforce year-on-year.
For instance, despite the waivers granted to operators in key sectors of the economy, particularly to those in construction and manufacturing sectors, the FIRS exceeded its 2023 revenue target by N816 billion with total collections of N12.37 trillion, reflecting a 107% performance over its N11.56 trillion target
In the 2024 fiscal year, the Federal Government has set a N19.41 trillion revenue target for the Service, representing an increase of 67.91% over the previous year’s target.
