With the price of oil tumbling drastically to $48.86 per barrel in October 2015, after which it slid further to $44.82 the following month and $37.80 in the last month of the year, the signs were bold that Nigeria was facing a major economic crisis. The implication of the slump in revenue derivable from oil, the major source of funding for country’s infrastructural and human development aspirations, was that the then new administration of President Muhammadu Buhari had flown into the most inclement weather possible. Public expectations of a national boom time were sky-high, but were almost immediately shattered, as government at all levels was hamstrung in the discharge of its responsibilities and obligations. At the state level, government, with the exception of a handful of states, for example, was unable to pay civil servants’ salaries and pensions to retirees let alone develop ideas for life-altering infrastructure projects and human development initiatives. Earlier in August that year, with the Federal Government left with no option than to look internally for revenue, especially from previously neglected sources, President Buhari appointed Mr. Tunde Fowler as chairman of the Federal Inland Revenue Service (FIRS). Fowler’s appointment was widely well received because he had been a consistently vocal voice against the country’s heavy reliance on oil revenue and, more crucially, on account of his headship of the Lagos State Internal Revenue Service (LIRS), during which the internally generated revenue (IGR) rose from a monthly average of N3.6 billion in 2006 to over N20 billion between 2006 and 2015. He met Lagos as a state unable to generate sufficient revenue from the vastness of its economic activities, and reformed revenue collection and administration processes to make Lagos the model of the genre. Yet, there was the question of whether or not he was capable of reprising what he did in Lagos State at the national level. That question, the figures show, has been answered with a resounding “Yes” in four years, a period during which the country slipped into recession. A little over a week ago, it was announced that the country’s taxable population figure was approaching a record 45 million. In 2015, the figure was 10 million, rose to 14 million in 2017, and 19 million in 2018. Last year, the FIRS collected N5.32 trillion, the highest ever in the history of the federal revenue agency. The preceding year, the agency collected N4.02 trillion and, in 2016, N3.3 trillion. The revenue growth, in spite of the country’s economic challenges, has been attributed to a variety of reform initiatives conceived to expand the tax net, block leakages and make tax collection methods more efficient. It has also been helped by enhanced collaboration with other stakeholders such as the Joint Tax Board (JTB) and other government agencies and a virile enforcement strategy, resulting in improved taxpayer compliance and collection of huge tax debts from defaulters, review of the National Tax Policy, amendment of tax laws and use of technology.

Source: the Sun

Contact InnerKonsult for Professional Services on Tax, Accountancy and CAC Services. O8038460036, www.innerkonsult.com