Executive Chairman of Nigeria’s Federal Inland Revenue Service, FIRS, Tunde Fowler, says that Africa has huge revenue generation potentials which could only be realized if African leaders would grant autonomy to their countries’ Revenue Authorities.

The former head of the Lagos Internal Revenue Service, LIRS, shared the experience of the autonomous FIRS and LIRS, in his presentation titled: “Establishment of An Autonomous Revenue Authority With An Independent Board-The Nigerian Experience”.

Fowler said this at the African Tax Administration Forum and International Monetary Fund, ATAF-IMF, seminar in Cape Town, South Africa.

He pointed out that the autonomy of the Nigeria’s Tax Authorities has brought about a huge increase in collection by tax authorities in Nigeria.

Fowler said “Clearly, Revenue Authorities across Africa have the potentials to generate funding for their respective governments and they will perform better if they are allowed to fully be in charge of their day to day operations and empowered to hire staff, pay competitive salaries and provide regular training for staff.

“The compelling evidence from Nigeria’s experience is that wherever Revenue Authorities have been granted operational, administrative and financial autonomy and allowed to operate with minimal civil service bureaucratic encumbrances, revenue administration has been enhanced and tax collection performance has gone up significantly.”

The tax boss maintained that the independence of revenue boards has proven to be beneficial for revenue generation agencies in meeting up with their responsibility of generating funds for government to carry out its projects and programmes.

For instance, Fowler noted that revenue generation increased “from N1.846 trillion in 2007 when FIRS was granted autonomy to an average of over N4.5 trillion in 2015.

“In the LIRS, tax revenue grew from N50 billion in 2007 to N270 billion in 2015.”

The FIRS chairman said that Nigeria had neglected revenue generation from taxes due to more focus on income from oil but following declines in oil proceeds in the 1990s, government was forced to adopt series of tax reforms and initiatives.

He recalled that at that time, the FIRS was under the Finance Ministry and was faced with many hitches characterizing the civil service, including absence of financial and administrative autonomy, existence of leakages in revenue collection due to lack of transparency and corrupt practices by some tax officials and taxpayers, etc.

Fowler noted that various reports and recommendations by experts in revenue generation, eventually led to the promulgation of the Federal Inland Revenue Service (Establishment) Act, No. 13, 2007).

“It was the second time a tax agency would enjoy autonomy in Nigeria with an Act of Parliament.

“The first being the enactment of the Lagos State Internal Revenue Service Law in 2006 by the Lagos State House of Assembly,” he said.

He explained that the FIRS, under the supervision of its independent Board, has been able to initiate and implement various revenue collection in the country.

The FIRS chief executive listed the initiatives of the service which lead to the increase of revenue generation in the country to include amongst others: the VAT Auto-Collect project; the Integrated Tax Administration System (ITAS) project; the National Taxpayer Identification Number (TIN) project; Massive Taxpayers Registration activities, etc.

Fowler acknowledged that “there is no ‘one size fits all’ way” to achieve an improved tax regime, but “a good way to start is to put in place requisite legal and administrative framework to ensure that the Revenue Authority can function with less public service bottlenecks…”

He added that political support and general policy direction from the supervisory Ministries of Finance, will also be critical to the success of Revenue Authorities.