FIRS sets N4.9tn Revenue Target to Fund Budget

 

The Federal Inland Revenue Service on Tuesday projected a revenue target of N4.95tn for the 2016 fiscal period to fund the Federal Government’s budget.

The Executive Chairman, FIRS, Mr. Babatunde Fowler, gave the figure in Abuja at the opening session of the organisation’s 2016 corporate strategy retreat.

The retreat with theme: ‘Optimising non-oil tax revenue collection through compliance and enforcement’, was attended by FIRS directors and other top government officials.

Fowler said the service would adopt innovative ways to achieve its target, noting that more attention would be given to improving non-oil revenue through effective compliance and enforcement activities.

Giving a breakdown of how the N4.95tn revenue would be collected, the FIRS boss said N2tn or 40.35 per cent of the total would be generated from Value Added Tax.

This will be followed by Companies Income Tax, with N1.87tn or 37.87 per cent; Petroleum Profit Tax, N800bn or 16.14 per cent; and Education Tax, N180bn or 3.63 per cent.

Others are National Information Technology Development Fund, N20bn or 0.4 per cent; and Consolidated Development Levy, N80bn or 1.61 per cent.

Fowler said, “In 2016, we do not have the luxury of not meeting our targets, especially as the government is looking to non-oil taxes to bridge the revenue gap. In this regard, we have proposed a revenue target of N4.957tn for 2016. This target is largely dependent on non-oil collections and in particular, VAT will account for N2tn and CIT is expected to account for N1.87tn.

“Between them, these two taxes are expected to provide almost 80 per cent of our collection in 2016. We, therefore, have our work cut out and there is no room for complacency.”

On the revenue performance of the service for the 2015 fiscal period, the FIRS boss said the agency was able to generate a total of N3.74tn out of its target of N4.57tn.

He attributed the underperformance to a significant drop in oil taxes as the service was unable to meet its target of non-oil taxes, particularly in the area of VAT and CIT collection.

For instance, he said out of a target N1.48tn for PPT, the FIRS was able to generate N1.28tn, indicating a revenue performance of 86.87 per cent.

For VAT, he said the sum of N767.33bn was generated out of a revenue target of N1.28tn, noting that this was 59.77 per cent of the target.

In the area of CIT, Fowler said the service collected a sum of N1.29tn from the target of N1.51tn, indicating a revenue performance of 84.89 per cent.

He admitted the fact that the country was currently facing challenges in the area of revenue generation owing to the drop in oil prices, noting, however, that the 2015 revenue performance was clearly unacceptable.

by Ifeanyi Onuba, Abuja