Taxation

Finance Bill 2021: “Our Tax System Must Work For Every Nigerian” – Muhammad Nami

Published

2 years ago

December 13, 2021

“We must build a tax system that is not only robust but that will outlive our respective services to this nation” – Nami

Olushola Okunlade Writes

The 2021 Finance Bill must be tailored towards enabling an efficient tax system that works for every Nigerian.

This was the position of the Federal Inland Revenue Service (FIRS) disclosed by its Executive Chairman, Muhammad Nami to journalists after a stakeholder engagement on the Finance Bill 2021, today at the House of Representatives, Abuja.

“Our laws and policies must first and foremost work for the Nigerian people who we have either been elected or appointed to serve,” Nami stated.

“Whatever proposals that have been submitted for consideration should be looked at critically vis-a-vis what works for Nigeria, the business community, the taxpayers, tax consultants, and the Nigerian system altogether. It will help us more if we realise that our collective effort and service are not about us. It is about our country.

“We must build a tax system that is not only robust but that will outlive our respective services to this nation; whether as members of the executive, the judiciary, or the legislature. In other words, these laws must be made in a manner that reflects not just what we feel is right, but what is indeed right -yesterday, today, and continues to be right tomorrow.”

Muhammad Nami further appealed that the Fiscal Policy Reform Committee and the House Committee on Finance should continue to make laws that stand the test of time and reflect economic realities. He further called for laws that will not only assist the government at the three levels in mobilising revenue but that will also assist small and medium scale enterprises to grow, and become taxpayers in the future.

The FIRS Executive Chairman also commended the leadership of the National Assembly and members of the Executive for the annual review of the Finance Act which he said has afforded the Federal Government the opportunity to deploy new ways of enhancing domestic revenue mobilisation and improving tax administration in the country.

“The Finance Bills have accorded the Federal Government and the Fiscal Policy Reform Committee the opportunity to annually review and identify gaps in our tax system, to fix them and ensure that government can earn the much-needed revenue for the execution of its mandate. Without the commitment of the National Assembly leadership and members of the Executive, from day one to the fiscal reforms that the Finance Bills were aimed to achieve, we would not have been able to attain the resounding successes we have recorded since 2020.” Nami stated.

Describing the annual review as a “clear demonstration of political will for the actualisation of good governance,” Nami highlighted that it was the enablement provided by the Finance Act 2020 that gave the FIRS the powers to deploy its own digital tax administration solution, TaxPro Max with its attendant results.

“That single revolutionary amendment to the FIRS Establishment Act gave us the power to deploy our homegrown digital Tax Administration Solution called the TaxPro-Max. This platform allows for seamless electronic registration of taxpayers, electronic filing of returns, and payment of taxes.

“Consequently, it is not surprising that the FIRS was able to collect over N5 trillion between January this year to date while we are confident that we will achieve our total VAT target for the year,” Nami stated.

Related Topics:#corporatetax #firs #nontaxcompliantcompanies #revenue #tax #taxcollector #taxcompliance

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Taxation

Tax: Dangote Cement Remits N412.9bn To Govt In 3 Years

Published

3 weeks ago

September 4, 2023

Business Echo Magazine

Rashidat Okunlade Writes

Dangote Cement Plc, a subsidiary of Dangote Industries Limited, (DIL), paid a total of N412.9 billion into the coffers of the Federal Government as tax for 3 consecutive years. A total of N97.24 billion was paid by Dangote Cement in 2020, N173.93 billion in 2021, and N141.69 billion in 2022.

This huge tax payment from only one of the conglomerate’s subsidiaries, re-affirms Aliko Dangote’s position that prompt and accurate tax payment is a duty for everyone who wishes to witness real growth and development. He posited that government cannot offer social services to the citizens without tax collection.

Dangote also advised the government to automate the tax system in the county, while commending the inauguration of the Presidential Committee on Fiscal Policy and Tax Reforms

“Maybe they should look at automating the tax system, just like what they did in India. If you go to India today, the country collects at least $1 trillion in various taxes. On petroleum products alone, India makes $100 billion yearly, because they charge 100 per cent on petroleum products. So, what I am suggesting is that people should pay taxes and if you pay, you demand services from government. I think it is a social contract.

“Once people start seeing that government is using the money to do infrastructure, fund education, healthcare, whereby the citizens don’t need to go out to India or other countries for medical attention, then people would settle down and start paying taxes,” the renowned entrepreneur added.

Meanwhile, other listed companies of Dangote Industries Limited also paid huge taxes to the Federal Government during the said period. Both Dangote Sugar Refinery Plc and NASCON Allied Industries Plc are listed on the Nigeria Exchange Limited.

Analysis of the yearly annual reports of Dangote’s three listed companies indicated that they paid N114.31 billion as tax in 2020; N187.17 billion in 2021 and N172.15 billion in 2022.

During the three years, Dangote Cement paid a total of N412.86 billion as taxes, Dangote Sugar Refinery paid N55.38 billion, and NASCON Allied Industries paid N5.39 billion.

A total of N97.24 billion was paid by Dangote Cement in 2020, N173.93 billion in 2021, and N141.69 billion in 2022. Dangote Sugar Refinery paid N15.85 billion in 2020, N11.97 billion in 2021, and N27.56 billion in 2022. For NASCON Allied Industries, it was N1.22 billion in 2020, N1.27 billion in 2021, and N2.9 billion in 2022.

The analysis indicated that companies from Dangote Group had remained major contributors to the nation’s economy with the volume of taxes paid in the period under review. The group has given Nigeria hope of earning income through economic diversification, implying that the nation can wean itself from dependence on the export of crude oil as major source of government income.

Dangote Industries Limited is a diversified and fully integrated conglomerate as well as a leading brand across Africa in businesses such as cement, sugar, salt, beverages, and real estate, with new multibillion-dollar projects underway in the oil and gas, petrochemical, fertiliser, and agricultural sectors.

Dangote Cement Plc is Sub-Saharan Africa’s largest cement producer with an installed capacity of 51.6Mta capacity across 10 African countries. The company operates a fully integrated ‘quarry-to-customer’ business with activities covering manufacturing, sales, and distribution of cement. It has a production capacity of 35.3Mta in its home market, Nigeria.

The Obajana plant in Kogi State, Nigeria, is the largest in Africa with 16.3Mta of capacity across four lines; the Ibese plant in Ogun State has four cement lines with a combined installed capacity of 12Mta, the Gboko plant in Benue state has 4Mta, while Okpella plant in Edo State has 3Mta.

Dangote Cement Plc has a long-term credit rating of AAA by GCR, AA by Fitch and Aa2.ng by Moody’s due to its market-leading position, significant operational scale, and strong financial profile evidenced by the company’s robust operating and net profit margins relative to regional and global peers, adequate working capital, good cash flow, and low leverage.

The excellent credit ratings are due to its leading market position, significant operational scale, strong financial performance profile demonstrated by its robust financial profile relative to regional and global peers, adequate working capital, strong cash generation, and low leverage.

Dangote Sugar is a leading brand that has made a remarkable impact on the Nigerian sugar sector. Dangote Sugar refining facility at Apapa is the largest in Sub-Saharan Africa, with 1.44MT per annum installed capacity. The company’s sugar backward integration projects located at Numan, in Adamawa State, are focused on cultivation and milling of sugarcane to finished sugar.

Taxation

Hard But Necessary Reforms, Imperative To Ramp Up Tax Revenues — Muhammad Nami, Chairman Joint Tax Board

Published

2 months ago

August 7, 2023

Business Echo Magazine

FIRS: Nigeria’s Tax-To-GDP Ratio, 10.86% As At 2021

Rashidat Okunlade Writes

For Nigeria to attain optimum tax revenue collection capacity across the Federal, State, and Local Government tax authorities, the country must make hard but necessary reforms that would yield long-term benefits.

This was the position stated by the Chairman of the Joint Tax Board (JTB), Mr. Muhammad Nami, who is also the Executive Chairman of the Federal Inland Revenue Service (FIRS) at the 153rd Meeting of the Board which was held today in Abuja with the theme: “Harmonization and codification of taxes at the National and Sub-national levels: Key to achieving a tax-friendly environment in Nigeria.”

Mr. Nami, while delivering his address to the Board stated that for progress to be made in taxation, tax authorities must continue to explore and adopt measures and innovative initiatives that will lead to the optimisation of tax revenue for all levels of government.

“As the new administrations attempt to address the many socioeconomic challenges facing the nation on many fronts, it becomes imperative for all the levers of State to shake off any lethargic antecedents and focus on the goal of a national resurgence.

“The unique and privileged offices we occupy as drivers of the nation’s tax administration processes present us with a rare opportunity to take hard, but necessary decisions that are expected to yield long-term benefits and add immense value to our collective prosperity as a nation.

“In recent years, especially since the dawn of our current democratic dispensation, the importance of taxation has continued to be reiterated and reinforced by all, and the critical role that tax revenue plays in funding government and governance cannot be over-emphasized.

“However, as we continue to make progress in our unique model of taxation, it is appropriate that we continue to explore and adopt measures and innovative initiatives that will lead to the optimization of tax revenue for all the levels of government, in more efficient, more effective, more inclusive, and more sustainable ways.

“It is only by achieving this, that our efforts as tax administrators can trigger the manner of activity required in the productive sectors of our economy, towards achieving the immense economic potentials that we are capable of,” Mr. Nami said.

The Chairman of the Joint Tax Board further assured Executive Chairmen of State Revenue Authorities present that given the thrust of the current administration’s tax policy direction, the country was on the pathway to eradicating multiplicity of taxes as a core of its overall economic regeneration objectives.

Mr. Taiwo Oyedele, Chairman, Presidential Fiscal Policy & Tax Reforms Committee, while delivering a presentation on the theme of the meeting highlighted that multiple taxations were causing low tax morale in the country, as well as discouraging investments while creating room for corruption and making doing business difficult.

The Presidential Fiscal Policy and Tax Reforms Committee Chairman further noted that the solution to the country’s revenue challenges is not to introduce more taxes, but to focus on the few taxes that are high yielding, noting that with these, tax authorities would be able to collect far more than is currently being collected.

Mr. Taiwo stated that for the government to raise more revenue, it needed to get to a point where the total number of taxes collected at the Federal, State, and Local government levels would be at a single digit.

“We also need to clarify taxing rights. We need to integrate tax collection functions—that is, all revenues that are to be collected must be collected by a single revenue agency. Government must also do well to fund our tax agencies well. We also need to harmonise revenue administration and simplify our approach to tax compliance,” Mr. Taiwo stated.

He further advocated for the country’s tax authorities to use more technology, a review of the country’s constitution and tax laws, as well a revisit of Nigeria’s concept of fiscal federalism.

Taxation

FIRS Rakes-in Record N5.5 Trillion In Six Months

Published

2 months ago

July 24, 2023

Business Echo Magazine

Nigeria At 62: Entrepreneurship and Industrial Hubs Hold Key To A Beautiful Nigeria — Nami

Rashidat Okunlade Writes

The Federal Inland Revenue Service (FIRS) has announced a total tax revenue collection of N5.5 trillion for the half-year period of January to June 2023. This is the highest tax revenue collection ever recorded by the Service in any first six months of a fiscal year.

Mr. Muhammad Nami, Executive Chairman of the FIRS stated this while presenting the 2023-2024 tax revenue outlook to the National Economic Council at its meeting held on Thursday 20^th July 2023, at the Presidential Villa, Abuja.

The presentation, which contained FIRS’ 2023 Half-Year Collection Report, showed that the FIRS achieved over one hundred percent of its target for the first half of the year when compared with a mid-year target of N5.3 trillion.

According to the report, tax revenue collected from the oil sector from January to June 2023, stood at N2.03 trillion, as against a target of N2.3 trillion; while non-oil tax collection stood at N3.76 trillion, as against a target of N2.98 trillion.

Mr. Nami, in his presentation, further stated that the Service collected a total of N1.65 trillion in tax revenues in June 2023. This sum is the highest tax revenue collected by the Service in any single month.

Speaking to what he described as “a good head start, despite stubborn headwinds,” Mr. Muhammad Nami, attributed the excellent performance to improved voluntary tax compliance enabled by the automation of FIRS’ tax administrative processes.

“This is a good head start as we work towards meeting our target for the year. And it was achieved despite stubborn headwinds such as the impact of the currency redesign and 2023 General Elections on the economy in the first and second quarters of 2023”, said Mr. Nami.

“This half-year performance was achieved as a result of improved voluntary tax compliance by taxpayers, the continued improvement of automation of our tax administration processes, including the updated VAT filing processes; as well as our dogged engagement with stakeholders in both the formal and informal sectors of the economy.”, he concluded.

Commenting on the outlook for the remainder half of the year, the FIRS Executive Chairman gave assurances that the country should expect “better days ahead” in terms of tax revenue collection.

“We believe that the performance in the second half of the year would be better considering the continuing improvement to our tax administration processes and the positive impact of the current government’s policies on the economy,” said the Executive Chairman.

It would be recalled that the Service achieved a total collection of N10.1 trillion in the year 2022, being the highest tax collection ever made by the FIRS in a single year.