Revenue Collection As A Strategic, Effective Tool To Restructure
“FIRS”, the Federal Inland Revenue Service has stood out since its rebirth in 2019 under the leadership of its Executive Chairman, Muhammad Mamman Nami as one more agency of government working hard for the benefit of all Nigerians. Indeed FIRS broke the jinx and did wonders for the country by raising the revenue collection bar every year since his coming on board.
In 2021, the FIRS Chairman told Nigerians that the service collected N6.405 trillion in tax revenue for the year 2021, surpassing its target by more than 100%. What a great, incredible success, that was.
Since its creation in 1947, the FIRS had never crossed the six-trillion mark till Muhammad Nami took over the reins of the Service.
In 2022, the FIRS did not rest on its 2021 achievement but in fact added over 3 trillion Naira to its total tax collection for the year.
The FIRS, in the year 2022 collected a total of N10.1 trillion comprising of both N4.09 trillion from oil and N5.96 trillion from non-oil sectors. This is notably a paradigm shift from the country’s reliance on oil to the non-oil sector.
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But for the various tax waivers FIRS granted under various respective laws amounting to N1.8 trillion, the revenue collection would have reached N12 trillion in 2022. Undoubtedly, the FIRS Performance Report for 2022 is unprecedented in the history of the country’s revenue collection.
Providing perspective to this unprecedented tax collection, the FIRS noted in its 2022 Performance Update that the Muhammad Nami-led management on assumption of office adopted a four-point focus to aggressively and patriotically pursue tax collection as a “task that must be done”.
They include administrative and operational restructuring; making the service customer-focused; creating a data-centric institution; and improving its stakeholder relations.
From the 2022 Performance Report, Companies Income Tax contributed N2.83 trillion; Value Added Tax, N2.51 trillion; Electronic Money Transfer Levy, N125.67 billion while Earmarked Taxes contributed a total of N353.69 billion.
It is the first time that the FIRS will cross the 10-trillion Naira mark in tax revenue collection largely due to the foresight and determination of Mr. Muhammad Nami to make the difference in the country.
Some strategies the FIRS under Mr Nami’s leadership had adopted include strategic administrative and operational reforms; implementation of new policies towards improving FIRS capacity towards the fulfilment of its mandate, and appropriate deployment of technology for tax administration.
A look at FIRS tax revenue collection showed that in 2019 it collected N5.32 trillion; in
2020, it was N4.9 trillion and in 2021 it was N6.405 trillion.
Speaking on the outlook for 2023, Mr. Nami had in confidence stated that the Service would build on the current reforms, achieve full automation and continue to establish a resilient Service that would continue to provide sustainable tax revenue to fund the government.
“We intend to maintain, and even improve on the momentum in 2023,” he stated.
“Our goal is to identify more areas where we can improve upon in the delivery and efficiency of collection; plug loopholes, while deploying innovative reforms in data and artificial intelligence.”
Also a critical evaluation of 2022’s Company Income Tax records showed a significant hike in taxes paid by companies across the board.
For example, tax from firms in the information and communication sector rose by 158.51% from N51.05 billion in the 3rd quarter of 2021 to N131.97 billion in the corresponding period in 2022.
In the same vein, manufacturers paid the most taxes during the period in review, as the Federal Government increased the number of taxes collectable by the Federal Inland Revenue Services from 39 to 61 items.
It is my candid view that government can effectively use FIRS as a springboard for strategic and effective restructuring of the country’s economy.
All said and done, FIRS has proved that given the right leadership, support and resources, government agencies can be relied upon to patriotically generate money for it to deliver on its mandate on service delivery.
Undoubtedly, FIRS has witnessed serious transformation under the leadership of Mr. Nami since his appointment as its Executive Chairman.