How FIRS plans to meet N5.9trn revenue projection in 2021

THE Federal Inland Revenue Service (FIRS) has pegged 5.9 trillion naira as its revenue projection for 2021.

Mohammed Nami, FIRS chairman, made this disclosure on Wednesday while defending the agency’s 2021 budget before the House of Representatives Committee on Finance, led by James Falake.

Nami said out of the proposed figure, the non-oil and oil components were expected to generate 4.26 trillion naira and 1.64 trillion naira respectively.

He, however, put the cost of collecting the projected revenue at 289.25 billion naira as against 180.76 billion naira in 2020.

“Out of the proposed expenditure of 289.25 billion naira across the three expenditure heads, the sum of 147.08 billion naira and 94.97 billion naira are to be expended on personnel and overhead costs against 2020 budgeted sum of 97.36 billion naira and 43.64 billion naira respectively,” he said.

“Also, the sum of 47.19 billion naira is estimated to be expended on capital items against the budgeted sum of 27.80 billion naira in 2020. The sum is to cater for on-going and new projects for effective revenue drive.”

Review of the FIRS revenue projections in five years

2020

The agency had, in 2020, projected the revenue that would accrue to the federation at 6.06 trillion naira. The breakdown of the projected revenue revealed that 1.56 trillion naira would be generated from oil revenue and 4.5 trillion naira from non-oil revenue for the year.

Read AlsoStop mounting pressure on agencies to meet revenue targets, LCCI urges FG

The sum of 446 billion naira was expected to be made from stamp duties through the introduction of flagship tax of 1 percent on total contract sum being awarded across the country. It was to be paid by service providers/contractors while the statutory Value Added Tax (VAT) of 7.5 percent would be borne by consumers.

But the agency could only generate 4.6 trillion naira, according to a statement by Abdullahi Ahmad, FIRS director of communications and liaison, in January 2020.

The agency said the near 100 percent feat was exceptional when placed against the backdrop of the economic impact of the coronavirus outbreak; the global decline of crude oil prices; business disruptions and lootings during the #ENDSARS protests; tax waivers granted to ease the impact of the COVID-19 lockdown; tax exemptions granted to small companies in the 2019 Finance Act, and insecurity in some parts of the country.

It said crude oil, which used to contribute over 50 percent in tax returns through the petroleum profits tax in previous years, accounted for only 30.6 percent of the total revenue generated in 2020.

FIRS-YEARLY-REVENUE-PROJECTIONS-AND-GENERATIONS-FROM-2016-2020.
FIRS-YEARLY-REVENUE-PROJECTIONS-AND-GENERATIONS-FROM-2016-2020.

2019

The agency had generated a total sum of about 5 trillion naira  in 2019, which fell short of its projected revenue collection of about 8.8 trillion naira, thus posting a shortfall of about 3.8 trillion naira for the year.

2018

The FIRS broke Nigeria’s tax collection history with a total collection of 5.32 trillion naira at the end of 2018.

It was the agency’s  highest revenue prior to 2019. A closer figure was recorded in 2012 at 5.07 trillion naira, but with persistent target shortfalls since 2015.

Ex-FIRS boss Fowler, Buratai make list of politically exposed Nigerians who own properties in Dubai

Tunde Fowler, the then executive chairman of the agency, had said the oil component generated 2.467 trillion naira (46.38 percent), while the non-oil component was 2.852 trillion naira (53.62 percent).

2017

The agency announced that it collected a total sum of 4.03tn naira in the 2017 fiscal year.

The collection represented 82.38 percent of the government’s target of 4.89tn naira  for that year.

The revenue of 4.03 trillion naira  was, however, N730bn more than the 2016 total collection figure of 3.3 trillion naira.

An analysis of the collection performance indicated that taxes from non-oil sources accounted for 63 percent, while oil taxes accounted for 37 percent of the total collection.

Stamp duty recorded the most increase in performance with 94 percent during the 2017 fiscal period.

2016






     

     

    The agency proposed a revenue target of 4.957 trillion naira for 2016.

    The projection was expected to largely depend on the non-oil sector of the economy, with value-added tax expected to have accounted for 2 trillion naira, representing 40.35 percent of the total target.

    While corporate income tax was expected to account for 1.877 trillion naira, representing 37.87 percent of the target.

    However, the agency was able to collect  3.303 trillion naira, owing to the crash in the global price of crude oil. Oil prices dropped to less than 50 dollars a barrel for over nine months. The value of stocks on the Nigerian Stock Exchange (NSE) fell and purchasing power was slim. Nigeria economy also fell into a recession.

    You can reach out to me on Twitter via: vincent_ufuoma

    Join the ICIR WhatsApp channel for in-depth reports on the economy, politics and governance, and investigative reports.

    Support the ICIR

    We invite you to support us to continue the work we do.

    Your support will strengthen journalism in Nigeria and help sustain our democracy.

    If you or someone you know has a lead, tip or personal experience about this report, our WhatsApp line is open and confidential for a conversation

    LEAVE A REPLY

    Please enter your comment!
    Please enter your name here


    Support the ICIR

    We need your support to produce excellent journalism at all times.

    - Advertisement

    Recent

    - Advertisement