Taxation

FIRS Makes Positive Trend In 2022 Compare To Its 2021 Record, Collects N10.1 Trillion

Published

8 months ago

January 23, 2023

FIRS Makes Positive Trend In 2022 Compare To Its 2021 Record, Collects N10.1 Trillion

Olushola Okunlade Writes

The Federal Inland Revenue Service (FIRS) has announced that it collected over N10 trillion in tax revenue in the year 2022, the highest tax collection ever recorded in its history.

The Service made this known in its “FIRS 2022 Performance Update,” report signed by its Executive Chairman, Mr. Muhammad Nami, and released to the public on Monday, after his briefing with President Muhammadu Buhari.

“The FIRS, in the year 2022 collected a total of N10.1 trillion in both oil (N4.09 trillion) and non-oil (N5.96 trillion) revenues as against a target of N10.44 trillion.

“Companies Income Tax contributed N2.83 trillion; Value Added Tax N2.51 trillion; Electronic Money Transfer Levy N125.67 billion and Earmarked Taxes N353.69 billion.

“Non-oil taxes contributed 59% of the total collection in the year, while oil tax collection stood at 41% of the total collection,” the report noted.

It is the first time that the FIRS will cross the 10-trillion Naira mark in tax revenue collection.

The Performance Update Report further clarified that included in the total revenue sum is the sum of N146.27 billion which is the total value of certificates issued by the Service to private investors and NNPC for road infrastructure under the Road Infrastructure Development Refurbishment Investment Tax Credit Scheme created by Executive Order No. 007 of 2019.

The report also stated that the N10.1 trillion is exclusive of tax waived on account of various tax incentives granted under the respective laws, which amounted to N1,805,040,163,008.

Providing perspective to this unprecedented tax collection, the FIRS noted in the Performance Update that the Muhammad Nami-led management upon assumption of office came up with a four-point focus, namely: administrative and operational restructuring; making the service customer-focused; creating a data-centric institution; and automation of administrative and operational processes.

It further noted that over the period of 2020 to 2022, the management had introduced reforms bordering around this four-point focus which were producing results.

“The reforms introduced at different times in 2020 are gradually yielding fruits. By the close of 2022, the Service had fully restructured the administration of the Service for maximum efficiency and achieved internal cohesion such that all functional units are working in unison towards the achievement of set goals.

“As a result of the conducive environment created for staff, officers of the Service are pulling their weight on the global stage with international recognitions and awards;

“The Service had also automated most of the administrative and operational processes. A major leap was the full deployment of the TaxPro Max for end-to-end administration of taxes in June 2021. The module for the automated TCC went live 1st January 2023 while taxpayers had already downloaded over 1,000 TCCs this year without having to visit FIRS office,” the report read.

It also noted that the Service had operationalised its data mining and analysis system thereby allowing for data-backed taxpayer profiling.

Other reforms the Service introduced in this period focused on the detoxification of the tax environment by ridding it of mutual mistrust, negative tax morale, and tax evasion, through effective taxpayer education, open engagement with stakeholders, and improved services.

It noted that it is courtesy of these reforms, framed around the four-focus points that the Service was able to achieve this collection.

Mr. Muhammad Nami, Executive Chairman of the FIRS, commenting on the N10.1 trillion record tax collection achieved under his leadership stated that this was made possible through “dogged implementation of strategic reforms over the past two years; a renewed commitment by officers of the Service, accompanied with a boosted morale; as well as the innovative deployment of technology for automation of both tax administration and operational processes.

“This collection was possible through collaboration with our stakeholders, from our colleagues at the Executive branch of government, to the members of the judiciary, to our brothers and sisters at the National Assembly, as well as the tax advisory committee, professional bodies, unions, and most crucially our taxpayers.”   

Speaking on the outlook for 2023, Mr. Nami 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.

“We have peaked, but this is not certainly our peak. In fact, my hope is that this would be the least sum the Service would ever collect going forward.

“Our goal is to identify more areas where we can improve the delivery and efficiency of our collection; and plug loopholes, while deploying innovative reforms in data and artificial intelligence.

“Ultimately, we believe that the FIRS can shoulder the responsibility of providing revenue for the governments across the Federation to cater to the needs of the Nigerian people through taxes.

“This is feasible once we get the much-desired support from the three tiers and arms of government, as well as all stakeholders.”

The FIRS appreciated President Muhammadu Buhari for his support, as well as the Minister of Finance, Budget and National Planning, Mrs. Zainab Ahmed, and the Minister of State, Mr. Clem Agba.

“FIRS Management uses this medium to commend all patriotic taxpayers who paid their taxes correctly, stakeholders for their support, and officers of the Service for their dedication to duty.

“The Service equally owes its achievements in 2022 to the effective leadership of the Honourable Minister of Finance, Budget and National Planning – Mrs. Zainab Ahmed, her brother, the Minister of State – Mr. Clem Agba, members of the National Assembly, and the fatherly support of the President and Commander-in-chief of the Armed Forces of Nigeria – Muhammadu Buhari.”

This is the second consecutive year that the Service will record unprecedented tax collection.

In 2021, the Service achieved a record tax collection of N6.405 trillion, being over hundred percent of its collection target for the year, as well as the first time that the Service will cross the six trillion mark.

In 2022, building on the success of the preceding year, the Service achieved a record collection of N10.1 trillion, being over 96% of its collection target for the year, and the first time the Service will cross the ten trillion mark.

This collection represents an over one hundred percent leap from the tax collected by the Service in 2020—the first year of the current management of the Service.

Related Topics:#tax #taxation #taxcollector #taxcompliance #taxrevenue

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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.