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Business / FG Targets N250bn Revenue From Excise Duty In 2023 by naijacontacts4: 10:29am On Feb 07, 2023
Amid a revenue crunch, the Federal Government has targeted raising N250.09bn from excise duty in 2023 as a viable solution.

This was according to the latest 2023 fiscal framework document seen.

In perspective, the Federal Government targeted a combined figure of N98.53bn from excise duty in 2021 and N161.7bn in 2022.

It means that the government revenue target from excise duty rose by 153.82 per cent in two years and 54.66 per cent in one year.

Reacting to the development, economic experts, Idakolo Gbolade and the CEO of the Centre for the Promotion of Private Enterprise, CPPE, Dr Muda Yusuf disclosed that the government’s approach to imposing a duty on an existing heavily taxed private sector is unfair.

Gbolade stated that the government should look for other alternatives to revenue generation, especially sectors not currently on its tax net.

On his part, Yusuf disclosed that the government’s approach to revenue collection, as indicated in the new Finance Act, would deter foreign investors.


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Business / Firs Makes Faac Fat By Salisu Dambatta by naijacontacts4: 4:56pm On Jan 31, 2023
Many Nigerians hold the notion and presume wrongfully that every money invested in various development projects by the three tiers of government came from one loan or the other.

The fact is that most of the money deployed to finance national development in this country was generated internally through the efforts of the Federal Inland Revenue Service (FIRS).

The rejuvenated FIRS is now turbocharged in its revenue drive to ensure that the country continues to finance the provision of transportation infrastructure, expansion in power generation, transmission and distribution and giving greater access to tertiary education to develop the necessary skilled manpower to support the economy and enhance our collective wellbeing.

One of the most visible evidence of the effectiveness and historic success in revenue generation by the FIRS is manifested in the fatness of the distributable money that became available to the three tiers of government in the country, especially within the last two years.

For it is on record that under the watch of FIRS Executive Chairman, Mr. Muhammad Nami and his team, the revenue declared at the Federation Account Allocation Committee (FAAC) meeting at least thrice hovered around N1 trillion or even surpassed that figure at various months in the year 2022 . It was a feat.

This story regarding that feat from a news outlet is simply nice: “The Federation Account Allocation Committee (FAAC) has shared a total sum of N902.053 billion in November 2022 as Federation Account Revenue to the Federal Government, States and Local Government Councils.” The sum was a shade to a trillion Naira.

But a nicer story regarding shared money at FAAC in August 2022 runs thus: “The Federation Account Allocation Committee, has shared a total sum of N954.085 billion Federation Account Revenue to the Federal Government, States and Local Government Councils. Details of the revenue put gross statutory revenue at N1. 066 trillion for the month of July 2022.” The total was above a trillion Naira.

Yet another trillion Naira revenue shared at FAAC, courtesy of the FIRS, was reported in the media as quoted here: “The Federation Account Allocation Committee (FAAC), at its Meeting shared a total sum of N990.189 billion to the three tiers of government, as Federation Allocation for the month of December 2022.”

Read the clincher in the N990.189 billion distributed story: “the Gross Statutory Revenue of N1,136.183 billion was received for the month of November 2022.” Again it was above a trillion Naira within 30 days.

Commentators on national issues, especially those focusing on the provision of essential facilities that improve the wellbeing of Nigerians had repeatedly insisted that there is a strong linkage between those facilities and the trillions of Naira raked in by the FIRS.

The direct role of the FIRS in enabling the three tiers of government to have the requisite financial muscles to fund national development has placed the institution in the heart of national development.

The ability of the FIRS to generate revenue above its target in the era of Muhammad Nami became boldly obvious when the Service collected N6.405 trillion in 2021, which was over a hundred percent of its collection target for the year.

It was the first time that the agency crossed the Six-trillion Naira mark. It was achieved in the face of an economic downturn caused by the coronavirus pandemic.

The latest “FIRS 2022 Performance Update” report released by the Service indicates that the previous record of just over N6 trillion was dwarfed by the N10.1 trillion revenue it garned for Nigeria in the year 2022.

The direct role of the FIRS in enabling the three tiers of government to have the requisite financial muscles to fund national development is best illustrated by the over N10 trillion the revenue generation machine netted in for the federation in 2022.

The revenue Service said the amount was more than 96 per cent of its envisaged collection for the year. It is reportedly the highest tax collected by the FIRS since its establishment in 1947.

The good news from the FIRS, which made it possible for FAAC to have fat distributable amount of money for national development has shown that with a sincerity of purpose in public service as demonstrated by Nami and his team, Nigeria can sustain its trajectory to becoming one of the top 15 best countries on earth within a generation. Money generated by the FIRS will finance the process.

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Business / Revenue: FG Agencies’ Collection Cost Rise 28.24% To N422.39bn by naijacontacts4: 4:21pm On Jan 30, 2023
Major revenueg e n e r a t i n g agencies of the Federal Government, such as the Federal Inland Revenue Service (FIRS), the Nigeria Customs Service (NCS) and the Department of Petroleum Resources (DPR), received a total of N422.39billion as revenue collection cost from the Federation Account Allocation Committee (FAAC) last year, findings by New Telegraph show.

According to data released by the National Bureau of Statistics (NBS), the agencies received N79.41 billion, N110.91billion, N126.29billion and N105.78billion in Q1, Q2, Q3 and Q4’22, respectively. This means that that they collected a total of N422.39 billion as revenue collection cost from the FAAC in 2022. It also means that the total amount received by the agencies as revenue collection cost last year was N93.02 billion or 28.24 per cent higher than the N329.37 billion that they got in 2021.

Similarly, the agencies’ collection cost last year is N193.62billion or 84.63 per cent higher than the N228.77 billion they received in 2020.

Further analysis of NBS data shows that the FIRS, NCS and the DPR received a cumulative sum of N220.39billion as cost of revenue collection in 2019.

Available data indicates that of the three key revenue generating agencies of the government, the FIRS’ collection cost is the highest. For instance, the Service received N85.95billion as collection cost in H1’22 compared with N60.31billion and N44.06billion for the NCS and the DPR respectively. In 2021, the FIRS’ collection cost was also the highest at N142.8 billion, up by 27.5 per cent from N111.97 billion in 2020. It was followed by the NCS with collection cost of N99.91 billionandtheDPRwithN83.51 billion.

The FIRS is empowered by law to retain seven per cent of the revenue it generates as cost of revenuecollection, whilethe NCS and the DPR are both entitled to four per cent. According to the Section 15 (a) of the FIRS (establishment) Act, the major source of funding for the agency is “a percentage as determined by the National Assembly of all nonoil and gas revenue collected by the service which may be appropriated by the National Assembly for the capital and recurrent expenditures of the Service.” Last Monday, the FIRS announced that it netted its highest revenue collection ever in history with collection of over N10 trillion in 2022. Special Assistant to FIRS ChairmanonMedia, Johannes Wojuola, whodisclosedthisina statement, saidof the N10.1 trillioncollected, oilaccountedfor N4.09trillionandnon-oil, N5.96 trillion revenues as against a target of N10.44 trillion. According to the breakdown, Companies Income Tax contributed N2.83 trillion; Value Added Tax (VAT)-N2.51 trillion; Electronic Money Transfer Levy- N125.67 billion andEarmarked Taxes, N353.69 billion. Specifically, the statement said: “Non-oil taxes contributed 59 per cent of the total collection in the year, while oil tax collection stood at 41% of total collection.”

In the “FIRS 2022 Performance Update,” report also released last Monday, the Service noted that its management led by Executive Chairman, Mr. Muhammad Nami, had over the last two years, introduced reformswhichwereproducing results. “The reforms introduced at different times from 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 areworkinginunisontowards the achievement of set goals. “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 thisyear withouthavingtovisit FIRS office,” the report said. It also noted that the Service had operationalised its data mining and analysis system thereby allowing for databacked taxpayer profiling.

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Business / LIRS Reaffirms January 31 Deadline For Filing Of Yearly Tax Returns by naijacontacts4: 5:50pm On Jan 27, 2023
The Lagos State Internal Revenue Service (LIRS) has announced that January 31, 2023, remains the deadline for filing the yearly tax returns by employers of labour.

The LIRS Executive Chairman, Ayodele Subair made this known in a statement signed by the Head, Corporate Communications of LIRS, Monsurat Amasa.

According to the LIRS Executive Chairman, all businesses and employers of labour residents within Lagos State must file their annual income tax returns on or before January 31, 2023, as failure to comply with the directive would attract penalties as well as other statutory sanctions as stipulated in section 81 (2) of the Personal Income Tax Act (PITA) Cap P8 LFN 2004 (as amended).

The Act stipulates January 31st as the deadline for filing of annual income tax returns, failing which a penalty accrues.

“For filing the annual income tax returns in Lagos State, the only available platform is the LIRS e-Tax portal: https://etax.lirs.net. The e-Tax portal is built for the convenience of taxpayers and is easy, convenient and safe. All businesses and employers of labour are advised to use the e-Tax portal to file their returns.

“With the eTax system, corporate bodies are expected to find it more convenient to carry out tax transactions in the comfort of their homes and offices.

‘’Taxpayer ID of all employees is compulsory for the annual income tax returns to be successfully filed on the e-Tax portal. Therefore, all employees and taxable persons within the State are advised to generate a taxpayer ID (where applicable) and file their individual annual income tax returns on the e-Tax portal”, Subair noted.

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Business / FIRS Breaks Its 2021 Record, Collects N10.1 Trillion In 2022 by naijacontacts4: 3:38pm On Jan 24, 2023
The Federal Inland Revenue Service (FIRS) has 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 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 these four-point focus which were producing results.

For further inquires and updates visit:
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Business / Five Ways Nigeria Can Boost Revenue Without Hurting Investors by naijacontacts4: 5:03pm On Jan 17, 2023
Nigeria is grappling with a revenue crisis as its debt profile continues to widen, which has seen policymakers take decisions that many private sector stakeholders see as detrimental to businesses.

Speaking during the ministerial presentation of the 2023 budget recently, Zainab Ahmed, minister of finance, budget and national planning, said the federal government’s retained revenue as at November 2022 was N6.5 trillion, which is about 87 percent of the pro rata target of N7.48 trillion.

The actual expenditure of the government was N12.87 trillion, resulting in a deficit of N6.37 trillion that was financed mainly by borrowings.

“Fiscal risks are somewhat elevated, following weaker-than-expected domestic economic performance and structural issues adversely impacting the domestic economy,” Ahmed said.

Similarly, the 2023 budget (N21.83 trillion) has a deficit of N11.34 trillion which will also be financed mainly by borrowings from domestic sources (N7.04 trillion), foreign sources (N1.76 trillion), multilateral/bilateral loan drawdowns (N1.77 billion) and privatisation proceeds (N206.18 billion).

“We will intensify our revenue mobilisation efforts and intensify current efforts toward the realization of our crude oil production and export targets,” she said.

With a debt burden of N44 trillion as at September 2022, which may grow to N77 trillion by May 2023, economic experts have advised that the government must desist from more borrowing and rather boost investment inflow and widen tax nets to generate more revenue.

The World Bank, in its County Economic Memorandum for Nigeria tagged ‘Charting a new course’, outlined steps through which the government can generate more revenue without hurting investments and businesses in the country.

Increased trade and investment activities
The multilateral lender advised that Nigeria must increase its trade and investment activities regionally and globally, noting that they are key drivers of growth and poverty reduction.

According to the World Bank, Nigeria’s weak trade performance in recent years has been exacerbated by its protectionist policies and restrictive trade regime such as the FX restriction on certain imports by the Central Bank of Nigeria as well as bans imposed by the Nigeria Customs Service.

“Nigeria should not miss this critical time to take advantage of the continental momentum behind greater integration and to nurture the potential and dynamism of a growing number of highly innovative entrepreneurs and firms,” it said.

It noted that Nigeria has the least diversified economy apart from Angola, which has also limited its export profile with its major concentration on crude oil.

“Although Nigeria’s competitiveness has stalled overtime, even in areas of comparative advantage, there are emerging sectors in addition to services with potential for growth and diversification especially in agribusiness,” it added.

The World Bank advised that Nigeria must create a business friendly environment that will attract more investments, which will create growth enhancing jobs.

“A range of infrastructural, macroeconomic policy, and regulatory constraints has prevented the full potential of Nigeria’s private sector from being realised, infrastructure deficits have stifled private economic activity and hurt the competitiveness of Nigerian firms,” it said.

Subsidy removal
The World Bank, in its Nigeria Public Finance report, said Nigeria is the only country in the world that subsidises petrol and does not properly budget for it.

Alex Sienaert, chief economist at World Bank, Nigeria, projected recently at an economic event that Nigeria may spend as high as N4.8 trillion servicing fuel subsidy in 2022 which can increase to N5 trillion in 2023.

He said Nigeria spends a large share of its limited resources on untargeted and inefficient subsidies while social sectors like education and health suffer.

The bank said that although eliminating the petrol subsidy will be politically difficult, no other fiscal reform would have comparable fiscal benefits.

“There is no better policy than phasing out the petrol subsidy and using the savings to establish a compact with Nigerian citizens that deliver better development outcomes,” it said.

Tax system reforms
Tax revenues are necessary to ensure essential services, provide security to citizens, help tackle hunger and poverty and deliver basic services.

Nigeria has the lowest tax to GDP ratio, according to the World Bank.

It estimated that with the right reforms, Nigeria should be able to achieve a tax to GDP ratio comparable to Uganda at 12 percent and Kenya at 15 percent.

“There is potential for harvesting revenue-yielding sources such as increasing sin taxes, charging fees for electronic money transfers, and improving tax compliance by reinforcing revenue administration,” it said.

Safeguarding oil and gas revenues
As an oil-producing country, the multilateral lender recommends that Nigeria must safeguard its oil and gas revenues to improve its fiscal situation.

The country’s oil and gas sector is plagued by oil theft and pipeline vandalism, among other challenges, which have led to the exodus of international oil companies from the creeks, while some local operators have shut down production.

BusinessDay recently reported one of the criminal activities which involved small-scale oil thieves in small barges tapping flow lines in the Niger Delta and loading the stolen crude in barges. They go through riverine areas and smaller rivers to evade military presence and access vessels mooring offshore, depositing the crude in these vessels for sale in foreign countries, mostly in Asia.

In August 2022, Mele Kyari, group chief executive officer of Nigerian National Petroleum Company Limited, said the country was losing $1.9 billion monthly to crude oil theft, which made it unable to meet its OPEC quota.

The World Bank advised that the government needs to be more intentional about safeguarding revenue and assets to the oil and gas sector in order to ensure that the due earnings are received.

Spending available resources more effectively and efficiently
According to the World Bank, Nigeria needs to utilise its available resources in a more efficient and effective way such as spending more on critical public services to achieve its social and economic development objectives.

“For years, a large share of Nigeria’s resources have financed inefficient and regressive subsidies for petrol, electricity, and foreign exchange; not all these subsidies are accounted for in the budget, which makes them difficult to track and scrutinise,” it said.

The bank said Nigeria must strengthen its fiscal rules and include sanctions for breach of fiscal and debt rules, strengthen debt management and transparency and also improve data foundations for fiscal management.

The World Bank advised that as Nigeria plies the recovery path, its revenue mobilisation needs to be more strategic.

“Due to the precarious nature of the global economic recovery, revenue-raising policies and administrative actions must be carefully chosen in order not to undermine an already weak growth recovery path for Nigeria,” it said.

For further inquires and updates visit:
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Business / FIRS Introduces Taxpro Max To Ease Access To TCC by naijacontacts4: 3:05pm On Jan 04, 2023
The Federal Inland Revenue Service (FIRS) says taxpayers can now get their Tax Clearance Certificate (TCC) in a single click via its flagship Taxpro Max solution.

The service made announced this on Tuesday via its social media handles Twitter, Facebook, and Instagram where it stated that the generation of tax clearance certificates, which used to be issued within a period of two weeks would now be available with a single click by the taxpayer.

According to FIRS, TaxPro Max, a tax administration solution introduced by the tax authority in June 2021, is a one-stop-shop for taxpayer registration, tax returns filing, tax payment, and tax clearance certificate requesting, among other functionalities.

This innovation is coming on the heels of wide-scale technological reforms that the Service has embarked on in its bid to achieve a hundred percent automation of its tax administration functions.

Muhammad Nami, the executive chairman of the FIRS, said this functionality was in line with the objectives of the service to make the lives of taxpayers easier and ensure the ease of doing business in the country.

“One of our objectives as a service is to build a customer-centric institution,” he stated.

“That means an institution that has the customer at the heart of its innovations and solutions. It is for this reason that we have tuned the operations of our TaxPro Max solution to be able to deliver tax clearance certificates in the shortest possible time to taxpayers. At the click of a button, a taxpayer will get their tax clearance certificates, as long as they have no outstanding liabilities.

“This would impact in no small measure on the Ease of Doing Business in Nigeria”, Nami stated.

He further stated that the taxpayer could only generate their tax clearance certificates on the TaxPro Max platform when they did not owe any liabilities among other conditions set out for use of the platform.

According to the FIRS boss this innovation was aimed at appreciating taxpayers for their trust and contributions to national development, stating that the Service would continue to come up with innovative solutions that would make the taxpayers’ life easier.

He also urged taxpayers to continue to trust the government to serve their interest, as the taxes paid by them directly and indirectly are what the government at the three tiers deploy to provide social amenities, secure life and properties of the citizenry and provide critical national infrastructure, including schools, hospitals, roads, among others.

For more enquries on Professional Accounting, Tax and CAC services please visit: www.innerkonsult.com or call/whatsapp:08038460036

Business / Tax Clearance Certificate Now Easy To Obtain — FIRS by naijacontacts4: 5:29pm On Jan 03, 2023
The Federal Inland Revenue Service (FIRS) has said that taxpayers can now obtain their Tax Clearance Certificate in a single click through its flagship taxpro max solution.

The solution which is a tax administration module introduced by the apex tax authority in June 2021 is a one-stop-shop for taxpayer registration, tax returns filing, tax payment, tax clearance certificate requesting, among other functionalities.

A statement signed by Mr. Johannes Wojuola, Special Assistant to the Executive Chairman, FIRS (Media & Communication), yesterday, said the generation of Tax Clearance Certificates, which used to be issued within a period of two weeks would now be available on a single click by the taxpayer.

This innovation is coming on the heels of wide-scale technological reforms that the Service has embarked on in its bid to achieve hundred percent automation of its tax administration functions.

Commenting on this development, the Executive Chairman of the FIRS, Mr. Muhammad Nami, explained that this functionality was in line with the objectives of the Service to make the lives of taxpayers easier and ensure the ease of doing business in the country.

“One of our objectives as a Service is to build a Customer-Centric institution,” he stated.

“That means an institution that has the customer at the heart of its innovations and solutions. It is for this reason that we have tuned the operations of our TaxPro Max solution to be able to deliver Tax Clearance Certificates in the shortest possible time to taxpayers.

“At the click of a button, a taxpayer will get their Tax Clearance Certificates, as long as they have no outstanding liabilities.

“This would impact in no small measure on the Ease of Doing Business in Nigeria,” Nami stated.

Explaining further the FIRS boss stated that the taxpayer could only generate their Tax Clearance Certificates on the TaxPro Max platform when they did not owe any liabilities among other conditions set out for use of the platform.

For more enquries on Professional Accounting, Tax and CAC services please visit: www.innerkonsult.com or call/whatsapp:08038460036

Business / Company Tax For Q3 2022 Stood At N810.19bn — NBS by naijacontacts4: 5:51pm On Dec 21, 2022
The National Bureau of Statistics (NBS), says the aggregate Company Income Tax (CIT) was reported at N810.19 billion for Q3 2022.

This is according to the NBS Company Income Tax(CIT) Q3 2022 Report released in Abuja.

According to the report, this shows a growth rate of 13.41 per cent on a quarter-on-quarter basis from N714.40 billion in Q2 2022.

The report said local payments received were N483.17 billion, while foreign CIT payment contributed N327.02 billion in Q3 2022.

It said on a quarter-on-quarter basis, the arts, entertainment, and recreation activities recorded the highest growth rate with 93.33 per cent, followed by agriculture, forestry, and fishing with 75.38 per cent.

“On the other hand, accommodation and food service activities had the lowest growth rate at 64.81 per cent.

“This was followed by water supply, sewerage, waste management, and remediation activities at -64.75 per cent.”
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In terms of sectoral contributions, the report showed that the top three largest shares in Q3 2022 were manufacturing at 28.76 per cent, information and communication at 27.31 per cent, and financial and insurance at 8.81per cent.

“On the other hand, activities of households as employers, undifferentiated goods- and services-producing activities of households for own use recorded the least share with 0.003 per cent.

“This was followed by water supply, sewerage, waste management, and remediation activities at 0.05 per cent; and activities of extraterritorial organisations and bodies at 0.11 per cent.

The report, however, said, on a year-on-year basis, CIT collections in Q3 2022 increased by 71.46 per cent from Q3 2021. (NAN)

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Business / FIRS Grants Waiver On Outstanding Interests, Penalties Imposed By Taxpro Max by naijacontacts4: 5:45pm On Dec 02, 2022
A former Senator representing Kaduna Central District, Shehu Sani, has challenged President Muhammadu Buhari to name the governors ‘stealing’ local government funds in the country.

Sani made the appeal in a tweet via his verified Twitter account on Friday.

He wrote, “The President should have the courage to specifically mention those governors pocketing LG allocations rather than timid generalisation.”

His challenge comes on the heel of Buhari’s revelation that some state governors remitted half of the funds allotted to local governments in their states.

Sani urge the President to be courageous in being explicit with the names of the governors involved in the reckless use of local council funds.

Recall that Buhari made the revelation at a parley with graduands of Senior Executive Course No. 44 2022 of the National Institute for Policy and Strategic Studies held at the Aso Villa in Abuja on Thursday.

He said, “Governors and local government officials who ‘pocket’, according to the President, public monies are to blame for the stalled development at the local governments.”

However, the 36 governors in the country have not made their position on the development known.

Meanwhile, the Chief Press Secretary to the Nigeria Governors’ Forum Chairman, Governor Aminu Tambuwal of Sokoto State, Muhammad Bello, disclosed that he did not receive any formal communication on the issue.

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Business / Tax Evasion: Reps Committee Gives 7-day Ultimatum To FIRS, Summons 9 Oil Compani by naijacontacts4: 5:41pm On Nov 30, 2022
The ongoing investigation of the alleged tax evasion by some oil companies operating on the shores of Nigeria has taken a dramatic twist as the lower legislative chamber has issued a seven-day ultimatum to the Chairman of the Federal Inland Revenue Service (FIRS) Chairman, Mr Muhammad Nami, to appear before its Ad-hoc Committee.

Irked by his refusal to appear on Tuesday, the Chairman, House of Representatives Ad hoc Committee investigating the Structure and Accountability of the Joint Venture (JV) Business and Production Sharing Contracts (PSCs) of the NNPC from 1990 to date, said the lower legislative chamber would continue to follow its rules and traditions, hence, the Committee has issued a seven-day ultimatum for the FIRS Chairman to appear or risked being compelled to do so.

He revealed that it was the resolution of all the panel members in attendance that Nami must appear before them to clear the air over his alleged collaboration with oil companies to evade tax running to trillions of naira when the nation borrows money in order to fund budget.

Fulata said: “Well, this is the resolution of all of us in the Ad-hoc Committee that the FIRS Chairman, Muhammad Nami must appear to explain the whereabout of trillions that would have accrued into the Federal Government Account as tax by the oil companies.”

He directed the Clerk of the House of Representatives, Yahaya Danzaria to write a subpoena to the FIRS Chairman, Mohammad Nami to appear on Wednesday 7th December, 2022.

According to the lawmakers, this is the last opportunity Nami has to voluntarily appear before the Committee. If he fails to appear, on Wednesday 7th December, the probe panel will then direct the Inspector General of Police to bring him by force.

The Shell Petroleum Development Company of Nigeria and First E & P sent apologies to the panel over their inability to appear before the committee on Tuesday. They promised to appear in their next sitting next week. The two companies had last week appeared before the committee but promised to appear today (Tuesday ) to furnish the committee with documents being requested for.

Oil companies expected to appear before the probe panel on Wednesday 30th November 2022 include, Agip (Nigerian Agip Oil Company); Agip (Nigeria Agip Energy); FAMFA; Pan Ocean; New Cross Exploration; New Cross Petroleum; GEC Petroleum Development Company; Enageed Resources Ltd; Ten-Oil Petroleum Energy Ltd; Sahara Energy Resources Ltd and Millennium Oil and Gas Ltd.

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Business / 7th ATAF: Rethinking Governance To Raise More Tax Revenues by naijacontacts4: 4:59pm On Nov 29, 2022
In this article, MARK ITSIBOR x-rays the outcome of the recently concluded 7th ATAF general assembly and concludes that African nations must engender public confidence by rethinking governance to elicit willingness of the citizens to pay tax

As it stands, Nigeria and indeed, many African countries have been very innovative and resilient in their mission to mobilise domestic revenue through taxation. That has obviously raised the non-oil revenues of Nigeria, but not to a significant extent.

Like other nations, Nigeria that hitherto relied largely on mono-products like oil revenue has been forced to think out of the crude oil box. The outbreak of COVID-19 pandemic and economic shocks from the ongoing Russia/Ukraine war are some of the external factors that have exposed the vulnerabilities in most countries of the continent.

Expectedly, African tax authorities are now rising up to the occasion. The agility they have shown in adapting quickly to the new requirements imposed by COVID-19 and other external shocks in order to continue to meet fiscal needs is exemplary.

However, despite the innovative and aggressive revenue drive across Africa, lack of public confidence in the governance system of most of African countries is a major reason most individuals and businesses are recalcitrant on tax payment, resulting in underpayment of taxes.

That was the focus of discussions at the recently held 7th general assembly of the African Tax Administration Forum (ATAF) hosted by the Federal Inland Revenue Service (FIRS) in Lagos. The 7th ATAF General Assembly, had in attendance tax administrators from 41 tax authorities in Africa. It is the first physical gathering of the forum since the covid-19 pandemic. The conference took place from the 31 October – 4 November 2022.

Truth is, bad leadership has been a major contributor to the lack of visible development – characterized by overwhelming corruption, infrastructure deficit and social unrest in the continent. The implication? Lack of public confidence across Africa, which speaks to the reason for the selection of the theme of the Lagos conference: “Rethinking Revenue Strategies: The Human Face of Taxation”.

It took the intervention of chairman of the FIRS Muhammad Nami to set the ball rolling for what turned out to be honest truth for all. For a start, Nami said governments across Africa must begin to rethink governance, engender public confidence and trust in government by providing value for taxpayers’ money in line with their obligations under the social contract they have with citizens. “The fiscal social contract which hinges on the willingness of the citizens to pay tax in return for the provision of public service, is a clarion call on the government at all levels in Africa to rethink governance,” Nami said. He was very correct.

The FIRS chairman won the admiration of participants at the venue when he opined that “if we must transform the tax system and enhance revenue collection in Africa, there is a need for the governance at all levels to engender public confidence and trust in government by providing value for taxpayers’ money.”

Not a few people agreed with Nami on the need to reconsider how projects are reported in the public space, with such reports communicating to convey the idea that taxpayers’ money’s is used to fund infrastructural projects.

Nami found a waiting voice in Lagos State Governor Babajide Sanwo-Olu who said that there was the need to give taxation a human face by implementing projects with taxpayers’ moneys that impact the lives of the citizens.

“There is no development without funding. We have amongst others, embarked on major transformational infrastructure projects cutting across transport, health, education, agriculture, technology amongst others,” Sanwo-Olu who was represented by the Executive Chairman of Lagos State Internal Revenue Service (LIRS) Mr. Hamzat Ayodele Subai at the event said.

He did not mince words when he drew the consciousness of the tax lords to the fact that the major infrastructural interventions of governments ought to be tailored at improving the quality of lives of the citizens and re-engineer economic growth and development trajectory with improved productivity of the citizenry, which invariably improves tax generating abilities of government.

“In a bid to save the human face of taxation, communication and feedback from the taxpayer is of paramount importance,” Mr. Subair said in alliance with the Nami.

Lead speaker at the conference, executive director of UNAIDS Winnie Byanyima, said that it is only through an equitable and sufficient taxation that Africa can free itself and set on a journey to a sustainable future where Africans will have the opportunity they deserve.

Pointing to the number of Africans under poverty line, Byanyima said African governments cannot rely on borrowing instead of reforming their tax systems as debt financing in Africa is three times the education spending, six times the health spending and twenty-two times the social spending. She stressed the need to tax the wealthy on the continent as the six richest Africans are richer 600 million of the continent’s poorest.

The views expressed by speakers at the event boldly reflected the outcome of the conference where participants were unanimous in their agreement that fiscal authorities should start giving tax payers value for their money through massive infrastructure development and human capital development, amongst others.

The challenges ahead are enormous, both at the international level and within the respective national jurisdictions. Despite that, there was a general agreement on the fact that governments need to provide public goods fairly and efficiently and these goods must be perceived as being at least of comparable quality to equivalent private services.

One major issue that re-echoed at the conference was that to be able to mend fractured social contract, delegates agreed two steps: create more room for citizen participation and; secondly to deliberately institutionalize initiatives to encourage restoration of the social contract must be taken.

For Executive Secretary of ATAF, Mr. Logan Wort, tax incentives are responsible for a lot of leakages and a major cause of illicit financial flows out of Africa. About 3.5 percent of GDP is what Africa loses in tax incentives.

“If you focus on taxation such as Value Added Tax (VAT) and others, you are regressively taxing poorer people more, but if you tax wealthy people more and better, you bring them into the tax net. According to the African Tax Outlook (2021), the total tax revenue in African countries fell by 0.2% in 2020 mainly attributed to the COVID -19 pandemic,” Wort said.

The ATAF head sighted challenges specifically faced by tax administrations during the pandemic affecting the ability to collect taxes but noted that tax administrations and different organizations responded to these challenges.

Minister of State for budget and national planning Clem Agba said digitalisation and automation of tax administration such as through e-filing, e-payment systems are critical for facilitating taxpayers to comply with a range of tax laws; noting that this simplicity, enables taxpayers to meet their obligations, and affirming that this in turn capacitates states to provide public goods and services.

As part of the sessions’ topic discussion on ‘Taxing the Digital Economy: Fairness, Inclusivity and Equity’, Grace Perez Navarro, Director, Center for Tax Policy and Administration, OECD stated the need to provide a framework that will help reduce the risk of double taxation. In her presentation, “each country should do its own impact assessment based on factors peculiar to their environment” she said.

In discussing tax and development in Africa, and the need to improve conditions for domestic resource mobilization, the assembly recognized that the social contract between the government and the public must be evident through improved public services to reinforce accountability and transparency, and in the process, build public trust.

The assembly also implored countries to prioritise the effective use of resources in a manner where the public can feel the positive impact of the sustainable development projects funded by tax revenues, underscoring that this will sustain confidence and belief in the social contract, and improve tax compliance with the multiplier effect of making revenue available for development financing.

It was also agreed that Tax morale is also higher in situations where taxpayers do not pay bribes for services and trust the tax administration. Critical towards enhanced social contract is the role of tax administration as primary interlocutors. Therefore, in relation to tax collection, it was noted that citizens’ willingness to pay tax is not only about how much services they receive from government but how they are treated by tax administration officials.

Mrs. Chiaka Ben-Obi, group lead, Digital and Innovation Support Group, FIRS in her presentation on ‘Tax and Technology- Human Centered and Socially Responsible Automation’ stressed the need to improve collection and improve technology as regards to providing people the convenience to engage with the tax authorities. “Currently the adoption by tax authorities in embracing digital transformation seeks to provide solution to teething challenges. The question is how have we taken the human side of things in technology? The implementation today is mostly driven by economies and by technology, not by human needs,” said Mrs. Ben-Obi.

Former chairman of the FIRS, Mrs. Ifueko Omogui-Okauru, pointed to the need for continuous engagement with stakeholders. She made this known during the discussion on the topic: Human Capital in Tax Administration: Taxperson of the future.

“One message is we need to engage people. Just employing people does not solve the problem. We need to remember leadership and leadership comes with the vision for our authority, for our service and even more so vision for our people. I was at a conference yesterday and I mentioned when we hear the word empowerment or enablement sometimes people feel it’s just about cash in the pocket but that’s not what enablement is” she said.

Mrs Omogui-Okauru further stated the importance of creating an enabling environment. “Enablement is about empowering people with skills that can help them, that can move them forward and be better people. It’s also about ownership and it’s a message to all of us as heads of our revenue authorities to own human capital management, to own where the authority is going”, she said.

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Business / LIRS Chief Vows To Sustain Tax Revolution In Lagos by naijacontacts4: 5:50pm On Nov 24, 2022
The Executive Chairman of the Lagos State Internal Revenue Service (LIRS), Mr Ayodele Subair, has promised to sustain the tax revolution in Lagos State.

The tax administrator gave this assurance last Friday at the New Telegraph Awards 2022 held at the Balmoral Convention Centre, Federal Palace Hotel, Lagos.

At the event, he was bestowed with the Most Innovative CEO of the Year Award by the newspaper for his giant strides at the agency since he was appointed as the head.

Mr Subair, who dedicated the award to his late father, the governor of Lagos State, the management and staff of LIRS, emphasised that the organisation would “continue to double our numbers so that we have enough funding to sustain the development of our dear state.”

He thanked the “organisers of this great award, including the publisher and management of New Telegraph,” for finding him worthy of the honour.

“I want to say thank you for recognising LIRS as being the most innovative and very strategic agency. We know we have to be on top of our game so that we can generate enough revenue for this wonderful state,” he stated.

The LIRS chief further said, “I am very happy to receive this award. It is the recognition of all the hard work we’ve been doing at the LIRS. This award encourages us to strive to improve our innovation.”

“The LIRS is hinged on technology, and anybody who wants to make any headway in tax administration has to embrace technology. So, it’s our joy that we are being duly recognized as the foremost agency in that direction,” he noted.

According to the New Telegraph Newspapers, Mr Subair was honoured for his landmark strides since he became the LIRS Executive Chairman in 2016, as he has been able to implement strategic innovations as well as double the initial revenue generation from N240 billion to N427 billion with his astute knowledge and experience in accounting and taxation.

Driving the tax revolution at the LIRS, other Mr Subair’s achievements, according to the newspaper, include the introduction of eTax in 2019, the launching of the whistleblowing initiative (2022), staff reforms and welfare upgrades (from 2017 till date), the introduction of the IBILE HUB Initiative (2021), Technology driven Operational Reforms in LIRS formed in 2022, where an Intelligent Unit- a team of undercover administration specially trained in information gathering and intelligence reports to provide information on all taxpayers in Lagos State and to ensure the agency has adequate information for appropriate profiling to expose tax defaulters.

Others are the establishment of the LIRS Service Charter (2021), the introduction of Automation of collection of consumption taxes (2017-2018), the inauguration of the Joint State Revenue Committee (JSRC) in 2021 as well as becoming the agency with the Highest Generated Revenue amid Covid-19 pandemic in 2020.

Business Post gathered that the New Telegraph Awards 2022 was attended by several dignitaries, including the Vice President, Prof. Yemi Osinbajo; the presidential flagbearer of the All Progressives Congress (APC), Mr Bola Tinubu; his PDP counterpart, Mr Atiku Abubakar; and the Governor of Lagos State, Mr Babajide Sanwo-Olu; among others.

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Business / Education Tax Collection Hits N300bn ― Tetfund by naijacontacts4: 5:27pm On Nov 23, 2022
The Tertiary Education Trust Fund (TETFund) on Tuesday revealed that the Education Tax collection by the Federal Inland Revenue Service has hit the N300 billion mark in the 2022 fiscal year.

Executive Secretary of the Fund, Arc. Sonny Echono who made this known in Abuja at a one-day meeting with the Heads of tertiary beneficiary institutions said there was a marked increase in the education tax collection from N189 billion in 2021 to N300 billion in the 2022 fiscal year for disbursement to beneficiaries institutions in 2023.

He explained that the Fund received N257 billion in 2020 for disbursement to beneficiary institutions and in 2021, it dropped to N189 billion leaving a shortfall of N68 billion due to the COVID-19 pandemic.

Echono, however, said that from September 2022, the figure jumped to N300 billion perhaps, because of the increase in education tax from 2 per cent to 2.5 per cent as approved by President Muhammadu Buhari.

”Yet, I am pleased to report that despite this challenge, in the last eight months, we have disbursed more funds to you than any year in the establishment of the fund.

”Our primary duty is actually a disbursement agency and we are expected to ensure that this is done judiciously for the purposes of funding projects in the various institutions,” he said.

Some of the Vice-Chancellors, Provosts and Rectors that attended the event appealed to TETFund to work with relevant Government agencies to address the challenges being faced by lecturers of tertiary institutions in Nigeria, noting the loss of eight months’ salaries by members of the Academic Staff Union of Universities (ASUU) as a result of the prolonged strike was unhealthy for the system.

Some of them also asked TETFund management to find a way of resolving the Foreign Exchange challenge being faced by Nigerian scholars abroad, especially by engaging the Central Bank of Nigeria (CBN) in the resolution of the forex crisis.

While speaking further on the need to summon the stakeholders’ interactive forum, the TETFund boss disclosed that the agenda of the meeting would focus on a number of concerns by the Fund in delivering its mandate as enshrined in the Act.

“We are also for the first time adopting the bottom-up approach to the budgeting process for the Year 2023 intervention cycle. As beneficiaries and institutions that execute the intervention lines, we will appreciate your input and suggestions for better delivery of the intervention budget.

“We shall at this meeting also receive feedback from you on the Fund’s project implementation in your institutions”.

“This no doubt underscores your support and commitment to the ongoing reforms to render our performance more responsive to the needs and aspirations of the nation’s tertiary education system.

“Another area of concern to the TETFund was the Research intervention lines. From available data, the nation is yet to benefit significantly from the desired impact of this intervention line. We shall therefore be considering new pathways to achieving greater impact on our various R&grin interventions”, he said.

Other areas of deliberation to him, will be promoting innovation, entrepreneurship and employability of graduates of Nigerian tertiary institutions, feedback on the TETFund Skill G intervention project from inception till date and a brief presentation by the Bureau of Public Procurement (BPP) on the procurement processes to facilitate speedy and seamless implementation of projects as chief accounting officers amongst others.

“Each topic will be anchored by identified players in those specific areas of discussion, which we believe will spur robust interaction and actionable ideas for greater results. As your intervention agency, we have remained consistent in our drive and strive for excellence employing practical ways and solutions towards repositioning and revitalizing our nation’s tertiary education system for the future generations to whom we owe this obligation”.

“We are improving global competitiveness and visibility through our Capacity Building Programmes at various levels and different areas of national interest We are forging partnerships both locally and internationally for better access to quality resources and services.

“These partnerships have yielded some level of benefits for our TETFund Scholarship for Academic Staff intervention (TSAS). We have signed MOU with some foreign institutions that offer free tuition and other incentives to our scholars who qualify for such benefits. We are making efforts to expand these partnerships and MOUs to other critical areas such as research and innovation, Agriculture, Engineering and ICT”, he added

He further disclosed that the focus of the Year 2022 zonal intervention on improving and expanding ICT capabilities was in recognition of the fact that the world has gone digital in practically all areas of human endeavours.

“We must therefore take deliberate steps to catch up with the rest of the world in the ICT space for needed national development’

“At the Fund, we are reviewing our processes for enhanced and better services delivery to our beneficiary institution. We are currently reworking our 2007 edition of Guidelines for Disbursement and will make it available to you when completed.

“We have also done some internal auditing of our staff to achieve better efficiency in the deployment to various departments of the Fund. We also requested you to do the same with respect to TETFund Desk officers and a summary of our expectations will also be presented at this forum.

“We are hopeful that these and other similar measures will place the Fund in a better position to discharge its mandate and functions to the nation,” he said.

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Business / New Tax Will Collapse Soft Drinks Sector, Nigerian Manufacturers Cry Out by naijacontacts4: 5:34pm On Nov 22, 2022
The carbonated soft drinks sub-sector of the Manufacturers Association of Nigeria (MAN) has raised the alarm over the federal government’s proposed 20 per cent ad-valorem excise tax on non-alcoholic beverages.
The MAN group was quoted as saying that the new policy would affect the widely consumed Carbonated Soft Drinks (CSD) segment.

According to agency reports, heads of the sectoral group rose from a meeting in Lagos on Friday and warned that the new tax policy if implemented, would spell doom for the sector. They noted that the prevailing N10 per litre tax regime was already crippling the sector with its biting negative impacts on their businesses.

Industry study already points to a eight-per cent revenue decline as a result of the government’s excise tax implementation. It is projected that the decline could hit 25 per cent by December 2022 if not reviewed. This excludes the cost of write-offs of products produced, excised but not sold.

With the proposed 20 per cent Ad-valorem tax introduction, the collapse of the soft drink market is imminent, the manufacturers argued.
‘‘This will be catastrophic as thousands of jobs will be affected and the ultimate aim of the government in collecting revenue will be completely defeated,’’ they said in a statement.

Some of the operators insisted they would wish to remain anonymous on the matter in the meantime for fear of victimisation.
“Most certainly, the additional 20 per cent will not only kill the sector but result in loss of revenue by the federal government, and a consequential phenomenal loss of jobs by various layers of the Nigerian workforce,’’ the source said in an email exchange.

This sectoral position was laid bare by the Soft Drinks Manufacturers Sub-sector of the MAN, which accounts for 33 per cent of the entire manufacturing sector in Nigeria.

Interestingly, the manufacturing industry contributes 15 per cent to the Gross Domestic Product (GDP) of the Nigerian economy, while the food and beverage sector contributes five per cent, and with a payment of N202 billion to the government on Value Added Tax (VAT), and N207 billion in Company Income Tax, an enormous amount that would be lost by the federal government if the sector is allowed to collapse, which will have a multiplier effect on infrastructural development and growth of the already troubled economy.

According to the Nigeria Bureau of Statistics (NBS), the food and beverage division of the economy in the last five years generated 1.5 million jobs – both direct and indirect.
It was only from 2020 that some companies in the sector strived to pay Minimum Tax, which is a pointer to the fact that the business climate is deteriorating, as the companies are finding it difficult to carry out their operations effectively.

There is evidence that the current N10 per litre excise tax on non-alcoholic beverages is ravaging the sector as the companies pay N10 for every litre of beverage produced, whether sold or not.

Speaking at the meeting, the sectoral heads decried the devastating effects of the N10 per litre tax, which has become burdensome with the high cost of operation in the country. This is already having devastating effects on the end cost to consumers, considering their poor economic condition; an additional 20 per cent will most certainly kill the sector.

They, therefore, called for the suspension of the excise tax being proposed by the federal government to forestall the collapse of the industry.

Corroborating this position, Corporate Affairs and Sustainability Director, Nigerian Bottling Company (NBC), Ekuma Eze, also pointed out that the N10 per litre tax has no bearing on profitability for any of the members of the sectoral group.

He stated that since the introduction of the N10 per litre Excise Tax, businesses in the sector have been experiencing a worrisome decline.

According to him, the average loss in volume and revenue is 10 per cent between June to September 2022, adding that it is estimated that the decline will further worsen by 25 per cent in December 2022.

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Business / IMF Recommends 15% VAT Rate To Nigeria, Other Economic Reforms by naijacontacts4: 1:17pm On Nov 21, 2022
The International Monetary Fund (IMF) has recommended to the Federal Government a number of reforms that are critical to creating much-needed fiscal space for economic growth, urging the government to raise Value Added Tax(VAT) from 7.5 per cent to 15 per cent.

The IMF prescribed a package of measures, which are estimated to create fiscal savings of close to 6 per cent of GDP during the period 2023-27 while also making room for higher social spending, and urged the government to undertake bolder fiscal reforms to create policy space.

The Fund advised the authorities to adopt tax policy reforms by considering adjusting tax rates to levels comparable to the average in the Economic Community of West African States (ECOWAS) as compliance improves.

“This includes further increasing the VAT rate to 15 per cent by 2027 in steps while streamlining numerous VAT exemptions based on systemic reviews, increasing excise rates on alcoholic and tobacco products while broadening the base, and rationalizing tax incentives by streamlining tax expenditures based on comprehensive periodic reviews.”

Also, the Fund urged the Federal Government to step up the implementation of tax administration reforms and welcomed the steady implementation of the tax automation system (TaxPro Max).

It recommended stepping up efforts to further expand coverage under a well-designed roadmap and strengthen taxpayer segmentation centring on the Large Taxpayer Offices (LTOs).

“In the medium-term, the authorities should develop a compliance improvement programme and comprehensive customs modernisation programme, improve the effectiveness of the State Internal Revenue Service’s administration of the Pay-As-You-Earn (PAYE) system, and strengthen inter-agency coordination and data sharing,” the IMF stated.

The recommendation is contained in the Staff Concluding Statement of the 2022 Article IV IMF Mission to Nigeria, which was released over the weekend.

The IMF observed that public finance is under stress with elevated fiscal deficits, high debt servicing costs and public debt projected to increase over the medium term.

It noted that despite higher non-oil revenues relative to 2021, the Federal Government fiscal deficit is projected to widen to 6.2 per cent of GDP in 2022, mainly due to fuel subsidy costs.

According to the IMF, “Without bolder revenue mobilisation efforts, costly fuel subsidies and rising debt servicing costs will keep overall fiscal deficits above 6 per cent of GDP in the medium term raising public debt to about 43 per cent of GDP by 2027.

“While still deemed sustainable, such a level of debt is projected to take up nearly half of the Federal Government’s revenues in interest payments making the fiscal position highly vulnerable to real interest rate shocks. It also leaves little fiscal room for vital social spending on education and health, where Nigeria fares poorly compared to peer countries in sub-Saharan Africa (SSA).

“Urgent revenue mobilisation and fuel subsidy reforms are critical to creating much-needed fiscal space. Successful revenue mobilisation episodes in SSA highlight the need for comprehensive fiscal reforms supported by high-level political commitment.”

Specifically, the Mission recommended: “Remove fuel subsidies and address oil theft. As a near-term priority, the mission highlighted the urgent need to remove fuel subsidies fully and permanently, which disproportionately benefit the well-off, by mid-2023 as planned. The government should also prioritise addressing oil thefts and governance issues in the oil sector to restore production to pre-pandemic levels.”

Also, it advised the government to increase well-targeted social assistance to mitigate food insecurity and cushion the impact of high inflation and fuel subsidy removal on the poor.

The mission recommended increasing social spending by up to 1.7 per cent of GDP during 2023-27 in well-targeted programmes in coordination with the World Bank and other development partners.

Among other recommendations, the IMF noted that fiscal transparency is critical for a sound fiscal policy and that notwithstanding recent improvements, some gaps remain.

“While the authorities have published the annual financial reports of the state-owned Nigerian National Petroleum Company (NNPC) since 2019, uncertainties remain regarding the nature of tax write-offs and fuel consumption volumes,” the IMF stated.

The mission recommended a closer look at the nature of NNPC’s financial commitments to the government and the costing details of the fuel subsidy, including a thorough financial audit, stronger cash management and better coordination among key public institutions as they are needed to increase the realism of budgetary forecasts and reduce reliance on central bank overdrafts.

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Business / Again, Tetfund Reiterates Calls For Upward Review Of Education Tax by naijacontacts4: 11:38am On Nov 18, 2022
The Tertiary Education Trust Fund (TETfund) has again stressed the need to boost education tax collection for the purposes of advancing tertiary education in Nigeria, further underscores the recent successes recorded through intervention projects.

Executive Secretary of TETfund, Sonny Echono stated this recently, at the agency’s interactive forum with the Federal Inland Revenue Service (FIRS) in Lagos.

The theme of the forum is: Boosting Education Tax Collection for the Growth and Advancement of Tertiary Education in Nigeria.

He said these intervention projects and programmes are delivered by the Fund in Beneficiary Institutions (BIs).

Echono stated that this had warranted as well as justified the call for a further upward review of the education tax rate to three per cent.

He said that it was also in tandem with goals of different economies, as stated by some experts.

Echono argued that the need to boost ‘Education Tax (EDT) collection’, especially at this economically challenging period, could never be overemphasised.

This, according to him, is in view of the pivotal role it plays in the nation’s educational system, as deployed by the Fund.

He said that it was one of the many vital reasons why the interactive forum was critical in the general operations of the Fund.

“There is no doubt about the fact that tax collections have direct correlation to earnings and subsequently, the growth of any functional economic system.

“Invariably therefore, the growth of education tax which forms the bedrock of TETFund’s vision and mission in the nation’s education is one that is consistently on the front burner.

“It is therefore not a mere coincidence that the focus of our discourse in this year’s forum is centered on how to stimulate, improve and sustain the collection of education tax by all stakeholders.

“We duly recognise the immense contribution, of your mandate as the foremost and critical revenue service of the Federal Government, from which we as a funding agency of the same government derive our intervention and operational funds.

“We must therefore expand incidence, by bringing all eligible tax payers within the basket, while assiduously improving efficiency of collection,” he stated.

According to him, as the executive secretary and accounting officer of the fund (Education Tax) he is committed to its judicious in line with the act and mandate of the TETFund.

He said that he would also ensure transparency and accountability to government.

Echono said he would also ensure accountability and transparency to the citizens, as well as the agency’s stakeholders, of which the FIRS was one.

The TETfund boss stated that in the year 2021, the agency received an Education tax collection of N189 billion, which was N16 billion lower than the previous year’s collection.

He said that this posed a serious challenge to the intervention activities of the Fund for the year 2022.

“We had to scale down project implementation for the year in our beneficiary institutions and our internal operations as well.

“With the improved Education Tax collection for this 2022, I am delighted to note that the FIRS has given necessary impetus to our desire copiously expressed on the need to increase its drive on the education tax collection.

“As at September this year, the education tax collection was reported to have recorded over N309 billion, exceeding the N305 billion target set by the FIRS for the year.

“This explains my earlier excitement and hope of an improved revenue generation, ultimately attaining a N500 billion yearly education tax collection by 2025.

“Further to this, it is imperative to ensure that the education tax net expands to cover as much as is possible, so as to further improve the tertiary education sector,” he said.

Echono said that it was also important to consistently initiate and sustain proactive measures such as auditing, which is an integral part of making sure that everyone pays their fair share of taxes.

He said that recent trends and reports on tax gap had proven that low audit rate was a major impediment in revenue generation, especially in education tax collection.

Echono further expressed optimism that the forum would afford them the opportunity to discuss the issues and many other options and possibilities in boosting education tax collection.

“I have no doubt that the FIRS is fully equipped with the knowledge and expertise and empowered with the force of law and the instruments of state to achieve this boost.

“Let me reiterate, and I believe that the FIRS will agree with me, on the need to constantly appreciate tax payers and the tremendous sacrifice they make to meet their corporate obligations.

“We assure them that the funds contributed will be prudently and judiciously deployed to rebuild the broken walls of the nation’s ivory towers,” he said.

On his part, the Executive Chairman of the FIRS, Muhammad Nami, said the theme of this year’s forum synergises with the vision of the Service, which is to make taxation the pivot of national development.

Nami who was represented byAbubakar Sadiq Mohammed, Director/State Coordinator, Lagos Mainland East of the FIRS, while commending the board of trustees and management of TETfund for the steadfastness in organising the forum.

Nami said it served as an accountability platform to the various stakeholders.

According to him, there has never been a time such as now, where debate for accountability and transparency from government institutions, particularly in this electioneering season, has been demanded by citizens.

He, therefore, noted that it was imperative for institutions such as the FIRS and TETFUND to undertake activities such as the interactive sessions.

These, he said, sought to engage stakeholders and report to them on how taxpayers’ monies had been expended.

He stated that the tertiary education tax had improved significantly since the beginning of 2022,adding that the Service had collected N309 billion as of September 2022.

“This is above the total N305 billion budgeted for the full year.

“I assure you that we will continue to ensure that no revenue gap is left uncovered, in our quest to improve tax administration with particular emphasis on full deployment of technology across our service lines and internal operations.

“The introduction of our Tax Administration Solution (Taxpromax) has enhanced compliance and collection of taxes from taxpayers.

“More importantly, we have been able to deploy technology to ease the burden of compliance to the taxpayers.

“We are doing more in this regard and recently launched our Service Charter, which encapsulates the rights of the taxpayer and the obligations of the tax administrator to the taxpayer,” he said.

He said that It was noteworthy that despite economic headwinds, FIRS had continued to make progress in revenue mobilisation for the three tiers of government.

“Suffice to say that the FIRS is now funding a significant portion of the Federal Account Allocation Committee (FAAC) in the last two years,” he stated.

According to him, between January.and September 2022, the FIRS has collected N7.5trillion, which is a significant improvement on the total collection of N6.4trillion for the entire 2021.

He said that with the development, it was clear that the reforms undertaken since 2020 had started yielding the desired results.

Recently, TETFund sought the support of the National Assembly (NASS) towards meeting its target of three percent education tax collection before the expiration of President Muhammadu Buhari tenure in order to increase funding for public tertiary educational institutions in the country.

Echono noted that given President Muhammadu Buhari’s commitment on increased funding for education, and the usual support of the National Assembly, the tax rate was increased from 2 to 2.5 per cent last year.

“The target is that before the end of this administration, it will increase to three per cent, which is a commitment that the President has already given to the Global Partnership for Education,” Echono said.

Echono further commended the level of support and cooperation the Fund has enjoyed from the committee and the National Assembly, while seeking its support in effecting the amendment of the education tax law.

“This is a major area that will be seeking the support of the National Assembly in terms of legislation.

“The other aspect is the fact that in contravention of this oversight, we also want to open our activities more to independent assessment and evaluation on our behalf.

“So we have designed a monitoring and evaluation template that will be involving key stakeholders, like the National Assembly, even the staff unions in our tertiary institutions, to join us independently look at some of the things that we’re doing,” he was quoted saying.

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Business / Finance Minister Recommends More Taxes To Reduce Nigeria’s Debt Burden by naijacontacts4: 5:07pm On Oct 19, 2022
The Minister of Finance, Budget and National Planning, Zainab Ahmed on Tuesday insisted that only the collection of more taxes and effective blocking of revenue leakages were realistic measures that would drastically cut borrowings and reduce the nation’s high debt burden.

Ahmed stated this at a workshop on tax expenditure organised by the ECOWAS Commission under the Context of the Implementation of the Support Programme for Tax Transition in West Africa (PATF) in Abuja.

The workshop is aimed at examining directives on harmonisation of tax expenditure management practices and the monitoring and evaluation of tax transition in ECOWAS member states.

The minister, represented by the Director, Technical Services in the Ministry, Fatima Hayatu, said the issue of tax expenditure was a great concern for the government.

Recall that the government had in July revealed that the country’s debt service cost in the first quarter (Q1) 2022 was N1.94 trillion, N310 billion higher than the actual revenue received during the period indicating that Nigeria’s debt service cost presently outweighs its revenue.

Ahmed, however, said the debt burden is not beyond what the government can handle.

She said: “If we have more taxes and redirect the taxes to the right fiscal sectors of our economy, we will reduce our debt burden. It is not as if the debt is beyond what the goverment can handle. If you look at the ratio of the debt to the Gross Domestic Product (GDP), I think the goverment is doing well.

“The debt is not something that cannot surmounted. The programme today is to block leakages where the taxes are being diverted. So if we block leakages, and if it is transparent, Nigeria will borrow less and we will have more money to finance other sectors”.

Noting that reforms in tax expenditure management were gaining traction in Nigeria, the minister observed that the development had resulted in the continuous development of in-house capabilities and internal restructuring in agencies for greater efficiency.

Ahmed also disclosed that government would commence the rationalisation of tax exemptions by phasing out antiquated pioneers and other tax incentives for matured industries.

The minister noted that contrary to what was obtained in the past, the country is now reaping the benefits of tax exemptions and concessions given to small businesses.

She explained: “A lot has changed, the system is more transparent and tax expenditure that government has given which is tax for bond is to encourage ailing and infant industries to be able to do more and employ more youth.

“I am glad to say that the tax expenditure that federal government has been given has encouraged industries and manufacturers to stay afloat even with the COVID-19 pandemic and also to say that they have been able to keep their staff. That to us is an achievement because we don’t want people to loose their jobs which would reduce the insecurity we are facing.

According to her, Nigeria was committed to strengthening transparency in its public financial management towards the drive to boost domestic resource mobilisation.

Speaking, Head of Corporations, European Union for Nigeria and ECOWAS, Cecile Tassin-Pelzer lamented the ratio of tax to GDP in the West African region, describing it as low.

While stressing the need for ECOWAS member states to effectively mobilise more taxes to offset the potential decline in revenues, she observed that domestic revenue is an important source of government expenditure funding, but revenue mobilisation remains a critical challenge in the region.

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Business / Nigerians Pay N1.23tn Tax To 36 States by naijacontacts4: 4:48pm On Oct 19, 2022
Nigerians across 36 states of the federation paid N1.23tn in taxes in 2021, a 19.19 per cent increase from the N1.03tn paid in 2020.

This is according to data from the States’ Internally Generated Revenue report by the National Bureau of Statistics released recently.

According to the data, tax revenues accounted for 66.16 per cent of state’s IGR (N1.56tn) in 2020 and 64.88 per cent of N1.89tn in 2021.

According to the data, taxes make up a chunk of state revenues. These taxes included: Pay As You Earn, direct assessment, road taxes, and other taxes paid by residents within a state.

Lagosians paid N405.08bn while the FCT paid N131.93bn in taxes. Others are: Rivers (N115.74bn), Delta (N70.78bn), and Ogun (N36.72bn) who alongside Lagos and the FCT paid the most taxes.

Ekiti (N7.55bn), Kebbi (N7.39bn), Abia (N6.51bn), Yobe (N6.09bn), and Taraba (N4.54bn) paid the least taxes.

While tax revenues have increased year-on-year, states are largely unable to sustain themselves on these revenues and other sources of income. Most of them continue to rely on federal allocations.

In its ‘State of States (2022 edition)’ report, BudgiT, a data firm, said, “Having been inundated with fiscal shocks from the Covid-19 pandemic in 2020 which plummeted government revenues, the 36 states of the federation commenced a rebound as the cumulative revenues of the states grew by 9.19 per cent from the N4.69tn earned in 2020 to N5.12tn in 2021.

“Cumulatively, there was a 33.66 per cent year-on-year growth in the aggregated Internally Generated Revenue (IGR) of the 36 states, from N1.2trn in 2020 to N1.61tn in 2021.

“However, the bulk of the states still rely heavily on federally distributed revenues to implement their budgets. While at least 50 per cent of the total revenue of 33 states were federal transfers, 13 states relied on federal transfers for at least 70 per cent of their total revenues.

“Being faced with declining revenues owing to Nigeria’s subsidy regime and the volatile price of crude oil, over-reliance on federal transfers is becoming increasingly unsustainable. Hence states as a matter of urgency need to wean themselves off the dependence on federally distributed revenues by significantly improving their capacity to mobilise revenues internally.”

In an earlier interview, a professor of Economics and Public Policy at the University of Uyo, Akpan Ekpo, had said states must focus on employment-creating investments in order to increase their tax revenues.

He said, “States need to attract investments. When people have jobs, they pay tax. If an individual doesn’t have a job, they cannot pay PAYE tax.

“There is high unemployment in every Nigerian state. If the states increase employment, bring in investors, start companies, foreign direct investment comes in, people will work, and they will pay tax.”

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Business / NHRC Wants Nigerian Businesses To Pay Human Right Tax by naijacontacts4: 5:24pm On Oct 13, 2022
The National Human Rights Commission (NHRC) on Wednesday called for payment of profit tax by businesses operating In the country.

The Commission said the tax, which should be a portion of their profit, will be used for the promotion and protection of human rights in the country.

The Executive Secretary of the Commission, Chief Tony Ojukwu, SAN (OFR) made the recommendation when he received the House of Representatives Committee on Human Rights and Legal Matters, according to a statement made available to our correspondent on Wednesday by Fatimah Agwai Mohammed, the Commission’s Deputy Director Public Affairs.

“Businesses operating in Nigeria need to drop a certain percentage of their profits, no matter how small, into the funds to enhance the work of human rights in the country,” he said.

On the Human Rights Fund, Ojukwu charged the committee to liaise with the Senate to ensure that the “Commission’s Amendment Bill already passed by both chambers of the National Assembly is harmonized and sent to the President for assent.”

He added that when the bill is signed into law, the Commission will be able to cover more ground in terms of promotion, protection, and enforcement of human rights in Nigeria.

The statement partly read, “The lawmaker stated that in consideration of the essential nature of the amendment Bill the Committee ensured that the House of Representatives passed it in 2021 before it was subsequently passed by the Senate early this year.”

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Business / Nigeria’s Low Tax Revenue Undermines Ability To Tackle Global Shocks, Says IMF by naijacontacts4: 5:16pm On Oct 13, 2022
The International Monetary Fund (IMF) has asked the Nigerian government to improve domestic revenue mobilisation to withstand global economic shocks.

Paulo Medas, division chief, fiscal affairs department, IMF, said this on Wednesday in Washington at a session on Fiscal Monitor.

According to Medas, Nigeria’s revenue generation is extremely low and puts the government in a tight corner to deliver basic services and respond to global headwinds.

He said the IMF had not seen any improvement in Nigeria’s deficit due to petrol subsidy payments.

“Many governments are facing double-digit inflation. And in this respect, fiscal policy needs to help monetary policy and work together to ensure price stability, it is absolutely critical for stable growth.

“Countries like Nigeria, especially those oil exporting countries, can take advantage of rising commodity revenues to address some of their needs.

“In Nigeria, which has benefited from higher oil revenues, we haven’t seen an improvement in the part of the deficit because of the margins with subsidies and also other issues with the production of oil and pressures on the budget. So our recommendation is to try to save some of these oil revenues and address emergency needs.

“Another aspect, I would say, Nigeria’s case was where tax revenues are really low. And this really undermines the capacity of the government to react to shocks and provide key services. So I would say in the case of Nigeria, the priority is in need to increase domestic revenue generation. You need to increase the State’s capacity to address the needs of the country and these will also help make fiscal policy more consistent to ensure economic stability.

While high inflation, debt and revenue challenges are not peculiar to Nigeria alone, the IMF division chief advised African nations to set priorities, block leakages, reduce waste and put resources into urgent needs.

“One is obviously putting resources into the most urgent needs. This has to be done together with the international community.

“Second, Africa already, before the pandemic, had a very low-level tax-to-GDP ratio. These levels have deteriorated… and this makes it much harder for governments to respond to crises, manage and deliver basic services, education, health and infrastructure. So it is important to step up the efforts of domestic revenue mobilisation and building capacity to respond to all these challenges.

“Third, improving the quality of spending and reducing waste is in different areas. For example, some countries cut on some state-owned enterprises, with government budgets and economy and most importantly, the need to improve social safety nets. All these will help the government start with those in need while reducing inefficient and wasteful subsidies. So all these key priorities for governments to do, but it’s not going to be enough in areas where countries face food insecurity and others.

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Business / FG Urged To Expand Tax Net For Budget Sustainability by naijacontacts4: 5:25pm On Oct 12, 2022
The Federal Government has been urged to take another look at expanding the nations’ revenue base to ensure budget sustainability and less borrowing.

Economist and consultant, Dr Biodun Adedipe made this call while analysing the 2023 Appropriation Bill presented to the National Assembly by President Muhammadu Buhari on Friday.

Dr Adedipe who spoke to TVC News’s Tolulope Ogunjobi, on the Business Nigeria show on TVC News said the main issue with the 2023 Budget that is apparent to a discerning observer is the level of borrowing to finance spending.

He added that the big elephant in the room of Debt Repayment also needs to be addressed but said it is not too bad but must be addressed going forward.

He said the decision to increase the MPR will also be pivotal as it has the capacity to increase production Costs through financing for manufacturers which will ultimately be passed to the consumers.

On increasing Revenue, he said the Tax Net needs to be widened through the use of incentives that will ensure that people pay.

He also said that those who are underpaying and not paying at all also need to be brought under the Tax umbrella to ensure that the nation has more revenue to help finance National Development.

“By saying that the budget is appropriately titled from those two heads, consolidation with Base. As the President mentioned, this is the last budget he will implement in office. That means the first essence is to consolidate on what has been done in the preceding seven years to the year of the budget. Then secondly, the fact that the employers will make the transition to a new administration, a new government appropriately so. Now the key issue for us is we go back to ask ourselves what a budget really is.

Simply a plan, intended spend and an expected revenue so that way it’s normally approved. So what do you want to spend on and why? That’s a primary question. Then, in terms of allocating the funds available, you will also be asking what is the relative importance of those expenditure? Before you talk about the volume, the value, the rates of both and the rest of them. Then the other side to it is expected revenue. How much do you expect from where do you expect it? What are the drivers of that revenue? So why can’t we have more of the revenue? Or is there a possibility that we might even have less? So these are usually questions that we ask in looking at the framework of a budget.

Now, as rightly mentioned, we have a budget of 20.51 Trillion Naira. And that of course comes from the proposed, or let me call it intended spend plan for 2023, as you mentioned. Also one major head is capital seeking funds, debt service, recurring non debt, and of course, tax transfers. Now, the first question to ask in interrogating, this is the allocation to those major headings.

Now, for me, we have history of not only the last seven years of this administration, we have history of the Nigerian economy. So what we see today is a reflection of the choices, decisions and actions that we took yesterday. The body announced, OK, this is what we expect next year. We are now making plans to say these are the things we want to do for the polarizing.

So that also tells us if we execute this project, where we are likely to find ourselves. So these are issues we want to interrogate. So now it makes in a sense that for us the first thing we observe here is debt service is very clear here, accounting for 30%.

We find our history also in what we have to do in the last several years and even before then, how our sovereign debt has been growing. Again, two critical things. We ask that we also guide our further integration of the point that when the national service begins to look at the numbers and the drivers of the numbers and that is why we do borrow so much. I still need to borrow much. What kind of borrowing are we looking at before we begin to talk about first indications? So why we need to borrow is very simple and straightforward economics. One where we call it insufficient revenue.

We are not getting enough revenue. That’s why we have to borrow. That’s why now if we have to borrow, for what purpose? Again, Facebook economics, we say you don’t borrow to consume, you borrow to develop capacity to be able to repay the loan in the future and service the obligation of the derivative of the loans. So that becomes also an issue that will be looking at in interrogation, the numbers.

And then of course, we now come to one big issue here. But the largest figure among the five expeditor held is actually the current non debt where you take out what will go as a smaller that is 4.9 trillion. That’s like a quarter of the entire spend for that amount at 24.3% of the tablet, which means we have a big public service. Public service. All of this comes in the personnel budget, which means that is an area we need to also interrogate going forward. What are we going to do there? All right, incidentally, in that budget statement, rather be reference to the Onsite report, there’s a white paper.

We want to implement what comes up as recommendations fitness between these governments and the incoming 1 second half of 2023. We want to see some recommendations in our white paper implemented because that ultimately will also impact snap costs as you see in this budget. Now, of course, we come to a small number seeking for stability, transparency.

What perhaps is also very important to note here is when you switch to the revenue side, there is a very big message there that the bulk of the revenue we are looking at is significantly less than the expenditure plan. But you find that the bulk of that revenue is coming from non ecosystem. Okay? That means you are looking at 7.81 trillion or 80% of the projected revenue coming from non resources oil accounting for only 1.92 trillion% oil for this.

Now we begin to talk the issues that I want to interrogate and see how these budgets can be improved when we get to execution. For me, that is the essence of this conversation assumption. While price $70 per barrel, that’s okay.

rom the data available and the realities of the market and expectations for 2023 that is not an issue to worry about. The production figure in that budget one six, $9 million per day, which includes also condenses of 3000 to 4000 per day. With me the ultra oil production is between 1.29 and 1.39 milligrams per day. So against our production capacity of over 2 million and against our open plus allocation it is much higher than that. That shows that there is a gap in there that is not coming into the podcast. Obviously for the reason of leakages. That is a major thing that pay attention to in person three.

So that will help us in terms of execution of this budget. The final comment before if you have any specific questions for me to answer is the deficit implied in this budget 578 trillion narrow or 478 percent of our GDP? OK, fiscal Ecology Act puts a limit of 3%. And again that also allows government to do opposite, greater than 3% if it becomes expedient.

All right? That means if you have a situation of quote unquote crisis at hand that requires government to spend more than it would normally have done in a normal situation and environment and that is happening. So now let me make a point here. There’s nothing wrong with borrowing. Like I said earlier, what you do with the borrowed money is one and then if you have a deficit in your podget, are you financing? The budget is also clear on that. 8.8 trillionaire will be borrowed and from the interpretation that means from commercial sources, whether domestic or foreign, but it will also be drawn down from bilateral and multilateral loans for projects and programs.

I don’t have any problem with that because they are usually very cheap, often times 1%. Random interest rates usually less than 2% ten are also very long. So that is not a problem. The real problem is the commercial loans and that’s the one we need to further interrogate. Of course, privatization proceeds, which is for me is significant, all of these are expected to be in government plans to finance deficits from new borrowing, privatization proceeds and narrow drawdowns and all of this I’m worried also along that line, but you also identified non oil space as doing pretty well at this time.

Can we really follow up with this also the 31 questions also we see what is happening and what NNPC is doing with regards to Oil theft at the moment, which is killing, eating bad into the fabric of the economy.

Now, do you see a headway along all of this? I’m worried about revenue one way or the other. That really is the major problem of not only fiscal operations, but of the Nigerian economy. Because what we have really is not a problem with borrowing, from my own perspective, because when you look at what we have borrowed mostly for in the last couple of years, they have been mostly for projects until recently when the revenue problem got red, we now have to borrow to fund the current expenditure.

Okay, so that now really is like right. We said that is what we must begin to look at, the entire possibility of expanding the pockets of non oil revenue. Of course, let me say it’s a huge debate when you talk about tax revenue. Tax revenue, that has about one of the lowest in the world. Okay, we talked about that. Quite all right. But then the argument on the other hand is, hey, in a very tough and challenging business environment, we are also the standard of living is quite generous. Do you want to now raise the tax rate? We say, no, don’t raise the tax rate.

We can expand the taxpayers. It’s by now seeking to bring it to that basket. Those who are not in there, on the one hand. Secondly, those who are also evaded in the form of either evasion as the quality which is illegal, or they also underpay, which means we can still expand nonreal revenue if we truly look at the avenues to reach leakages. Of course. And one of the great ways of doing that, and we have covered this over many years, is whatever you want people to do, put an incentive there. So if you want people to pay tax, put an incentive. Incentive is not about giving them money. It’s about, look, you have some services in government to require you can’t access those services unless we see evidence of proof that you pay tax”.

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Business / Buhari Appoints Adepoju Sunday As New Postmaster-general by naijacontacts4: 4:54pm On Oct 06, 2022
President Muhammadu Buhari has approved the appointment of Mr Adepoju Sunday as the new Postmaster-General/Chief Executive Officer (PMG) of the Nigerian Postal Service (NIPOST).

This followed the recommendations of the Minister of Communications and Digital Economy, Mr Isa Pantami.

The new Postmaster-General of NIPOST was appointed for an initial term of five years, according to a statement issued by Mrs Uwa Suleiman, spokesperson for the Ministry of Communications and Digital Economy.

Mr Sunday is a professional accountant and a former member of the House of Representatives. He was in the parliament between 2011 and 2019, representing Ibarapa East/Ido Federal Constituency.

NIPOST is an agency under the supervision of the Federal Ministry of Communications and Digital Economy. The appointment of Mr Sunday as the new PMG of NIPOST is with immediate effect.

Recall that the former occupier of the seat, Mr Ismail Adewusi, who was appointed in 2019, was suspended. Mr Bulus Yakubu was chosen in an acting capacity before the appointment of Mr Sunday as the substantive PG of the nation’s postal service.

The latest development means Mr Yakubu will return to his role as the Secretary to NIPOST Governing Board, Director (Special Duties) and also NIPOST Liason Officer to the National Assembly.

During the tenure of the suspended PMG, the federal government declared that NIPOST was the agency authorised to produce and collect stamp duties across the country.

By this declaration, NIPOST reclaimed the right to collect stamp duties from the Federal Inland Revenue Service (FIRS).

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Business / FG To Ramp Up Tax Collection, Eyes N9trn In 3yrs by naijacontacts4: 12:55pm On Oct 04, 2022
The Federal Government is ramping up its tax collection process with a plan to raise about N9 trillion from Value Added Tax (VAT) between 2023 and 2025.

This comes at the backdrop of an 83.4 percent jump in its VAT collections to N600.15 billion in Q2’22 from N327.2 billion in Q2’20.

Recall that a 50 percent increase in VAT rate from 5 percent to 7.5 percent commenced in February 2020, midway into the first quarter (Q1’20), as part of the tax reforms included in the 2019 Finance Act meant to help the government achieve its revenue projections for the 2020 budget and beyond.

The government’s revenue projection was based on the assumption that the consumption expenditure on which VAT is charged will average N35 trillion in 2023, N40 trillion in 2024 and N45 trillion in 2025.


This means that over the three year period, the government expects N120 trillion as total consumption expenditure of Nigerians. The government expects that at the VAT rate of 7.5 percent, this will translate into total VAT collections of N9 trillion from Nigerian consumers over the period.

Projections

The projections were made in the final draft of the 2023 – 2025 Medium Term Expenditure Framework and Fiscal Strategy Paper (MTEF & FSP) prepared by the Budget Office of the Federation.

The MTEF & FSP document stated: “Consumption expenditure on which VAT is charged is assumed to increase from an average of N35 trillion in 2023, to N40 trillion in 2024 and N45 trillion in 2025 after adjusting for exemptions, zero rated items and companies whose turnover falls below N25 million threshold.”

The government premised its projections on the expectation that more VAT payers would be brought into the tax net with administrative and operational improvements.

It stated: “Like the CIT (Company Income Tax), more VAT payers are expected to be brought into the tax net with the effective implementation of the provisions of the Finance Acts 2020 and 2021. The VAT projections over the medium-term are based on holding the rate at 7.5%.

“In the medium term, government will intensify efforts aimed at improving VAT coverage and collection efficiency. Wider coverage and improved collection efficiency will be achieved through nationwide VAT registration and monitoring, and deployment of ICT (auto-collect) platforms in more sectors of the economy. In addition, the solution for deduction and remittance of VAT and withholding tax (WHT) from state government contract payments is to be deployed in all the 36 states.”

Statistics

Meanwhile, analysis of data from the Federal Inland Revenue Service (FIRS) and National Bureau of Statistics (NBS) shows a steady upward trend in VAT collections since the commencement of the VAT rate increase in 2020.

VAT collections in 2021 amounted to N2.073 trillion; N1.531 trillion in 2020; N1.19 trillion in 2019; and N1.11 trillion in 2018. And already in the first half of 2022 (H1’22), Nigeria generated N1.19 trillion from VAT, with a projection of about N2.5 trillion collection for the full year.

A disaggregated quarterly analysis of the available VAT data shows that in Q2 2020, consumers paid N327.2 billion as VAT, N424.71 billion in Q3 2020, and N454.69 billion in Q4 2020. In 2021, in the first quarter (Q1 2021), VAT paid by consumers amounted to N496.39 billion, N512.25 billion in Q2 2021, N500.49 billion in Q3 2021, while N563.72 billion was collected as VAT revenue in Q4 2021.

In Q1 2022, VAT paid was N588.59 billion while N600.15 billion was collected in Q2 2022.

The N600.15 billion collected in Q2’22 represents 83.4 percent QoQ increase over the N327.2 billion recorded in Q2’20 when the full implementation of the VAT rate increase commenced.

Within the period under review, the highest quarterly VAT collection was the N600.15 billion generated in Q2 2022, which is also the highest VAT revenue in Nigeria at any quarter thus far.

Analysts’ view

Commenting on the tax regime, Taiwo Oyedele, Fiscal Policy Partner & Africa Tax Leader at PwC, enumerated the contributory factors to the rise in VAT collections, while noting that the major factor is the 50 percent increase in the rate.

Oyedele said: “The sustained increases that we have seen year on year in VAT revenue generation is attributable to a number of factors, chief among which is the increase in the rate from 5% to 7.5%.

“Also the tax authority has improved in its administration of the tax including audits, taxpayer education and automation, in addition to changes introduced to bring foreign service providers especially digital companies into the VAT net.

“This is despite the exemptions granted to small businesses from charging VAT and the expansion of items which are exempted from VAT such as lease of property, shared passenger transportation, air fares and more basic food items.

“To some extent, the devaluation of the Naira has also contributed to the increase in VAT collection as foreign currency denominated VAT liabilities yielded more Naira revenue.”

Oyedele further stated: “Overall, while some progress have been made regarding VAT administration, it is not yet ‘uhuru’ as more still needs to be done especially in terms of improving the collection efficiency and closing the compliance gap including ensuring full compliance by government at all levels and their MDAs.

“The current VAT revenue sharing formula among states is not equitable. This inequity should be addressed by allocating any domestic VAT collected from each state entirely to the respective state. Only VAT collected on imports, international services and inter-state transactions should be paid into the VAT pool and shared based on derivation. This will address the current controversy without creating new problems.

“In addition, some reforms are needed to expand the scope of eligible input VAT claims to cover capital items and all production overheads as well as services other than those relating to the final consumers as is the case in many climes.

“It is instructive to note that the controversy regarding the level of government empowered to administer the tax remains unresolved while the National Assembly made an unsuccessful attempt to include VAT on the Exclusive Legislative List. More recently the governors in their advisory are seeking to abolish states personal income tax in favour of a 10 percent states sales tax, and an increase in VAT rate from the current 7.5% to between 15% and 20%.

“However, policymakers must be mindful that consumption taxes are generally regressive in nature and likely to hurt the poor more than the rich and it is capable of further fueling inflation.”

In the meantime, the Chartered Institute of Taxation of Nigeria (CITN) has lamented the seeming inability of the government to expand the tax net in the country.

President, CITN, Adesina Adedayo, speaking at a conference on taxation, stated: “It is saddening that as of today, Nigeria’s tax revenue mobilisation performance remains below her capacity as the largest economy in Africa with one of the world’s largest population.

“The current number of people captured in the Nigerian tax net is grossly inadequate for a nation that desires to achieve development in the foreseeable future,” Adedayo said.

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Business / Interswitch Moves To Boost IGR In Northern States by naijacontacts4: 5:06pm On Sep 28, 2022
Leading integrated payments and digital commerce company, Interswitch, has said it is working with Internally Revenue Services (IRS) in the Northern states to help them leverage technology to increase their domestic revenue base.

According to figures from the National Bureau of Statistics (NBS), the Northern states are lagging behind their southern counterparts in terms of the value of Internally Generated Revenue (IGR) they collect.

Speaking in Abuja at an engagement forum with State Revenue Boards – Northern Region to discuss revenue collection and growth strategies using technology, Regional Head, North and Abuja Business, Interswitch Group, Mr. Thomas Ezeh, said despite the challenges of insecurity, infrastructure, knowledge and operational gaps which are impacting states’ ability to increase IGR, “We see challenges and we also see opportunities and we hope to harness these opportunities as we move on”.

He said what is currently generated in states represented only a percentage of their potential, which can further be optimised by deploying appropriate solutions.

Ezeh said technology remained critical to improving their revenue collection as well as plugging leakages and addressing corruption.

He said, “One of our major activities in the states is to help them collect their revenues and so we work with the IRS of the states and we felt it is a good time to call them together and discuss and share thoughts with them.”

Ezeh added that the technology company has continued to champion the automation of revenue generation using innovative solutions such as the Treasury Single Account (TSA) solution that facilitates the consolidation of revenue from states’ revenue collection bodies.

On his part, Group Head, Government and Mass Transit Business, Interswitch, Mr. Osasere Atohengbe, told THISDAY in an interview that the objective was to help plug leakages and optimise the various potentials that exist between the respective verticals in the states’

He said Interswitch would also bring visibility to the government’s business, including analytics and intelligent decision-making.

He noted that the company’s intervention in revenue collection dated back to over 10 years when it helped the Federal Inland Revenue Service (FIRS) to optimise its services as well as helped over 30 states of the federation to optimise the services that they provide, bringing visibility and transparency and helping to plug leakages.

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Business / FIRS Boss Traces Low Tax Compliance To Poor Utiilisation Of Proceeds by naijacontacts4: 5:29pm On Sep 27, 2022
The Federal Inland Revenue Service (FIRS) has said that tax compliance will only improve when payers are convinced that revenues are going to be used for the common good.

The Executive Chairman of FIRS, Muhammad Nami, stated this in his opening remarks at the launch of the Public Finance Database by the Nigeria Governors’ Forum in Abuja.

Nami argued that the low compliance rate in tax payments in most developing countries was a result of the failure of the social contract between the taxpayers and the government. He noted that those in political leadership in the country have a duty to promote a tax-paying culture by relating projects and infrastructural development executed by them to taxes paid by taxpayers.

“Taxpayers need to see what has been done with their money to be encouraged to continue to fulfil their obligations under the social contract they have with the government.

“I am delighted that one of the sessions focuses on the tax-for-service programmes as they impact tax revenues. This issue is dear to us as tax administrators as there is a nexus between the effective utilisation of tax revenue and tax compliance.

“The low level of tax compliance in developing countries can be attributed to the failure of the social contract between the taxpayers and the government. It is expected that if the citizens are committed to paying taxes, the government should be committed to using the taxes for the common good of all citizens,” he said.

The FIRS boss further argued that projects funded by taxpayers’ money should be reported as such and not personalised so that citizens would begin to relate with the projects as the proceeds of their taxes.

He added: “Those in political leadership should promote the tax-paying culture by relating projects and infrastructural developments executed by them to tax.

“The government at all levels are doing a lot with taxpayers’ money but citizens do not easily appreciate these facts because of the way and manner the projects are reported. There is the need to de-emphasize and de-personalise projects so that the citizens will begin to relate all the ongoing laudable projects in the states to tax revenue. This singular act to a great extent will increase the tax morale and enhance compliance.”

He called for the country to make a bold paradigm shift by harmonising the country’s tax system to optimise revenue collection.

“Recently, there has been a clamour for a holistic review of our tax system. Its proponents, including myself, have argued that if Nigeria must achieve its tax revenue potential as the fulcrum of economic development, harmonisation of our tax system must be undertaken.

“Tax harmonisation for enhanced revenue generation, which was the theme of the Second National Tax Dialogue was carefully chosen to reiterate the need for us as a nation to rethink the current tax system being operated.

“There was a consensus at the dialogue that Nigeria needs a transition to a unified tax administration as practised globally by most of the efficient and effective tax jurisdictions that have achieved optimum tax revenue collection.

“Certainly, there is no gainsaying that if Nigeria must be less dependent on external borrowing and buffer from the volatility and dwindling oil revenue, there should be a paradigm shift. Beyond politics and sentiment, the country should be willing to make those bold and hard but beneficial tax reforms and there is no better time than now if we must avert the looming debt crisis. The gains from a harmonised tax system far outweigh the fears expressed in some quarters, if dispassionately analysed,” he said.

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Business / Imperatives Of Reforming Nigeria’s Tax System by naijacontacts4: 5:25pm On Sep 26, 2022
NIGERIA’S persistently piddling tax collection amid an economy battered by low revenue, debt, poor infrastructure and high inflation is a problem which the President, Major General Muhammadu Buhari (retd.), and his economic team have failed to tackle realistically. In another exposé, the Nigeria Extractive Industries Transparency Initiative through its annual audits of the oil industry reiterates that the country is losing billions of dollars to tax evasion. NEITI’s 2020 report indicted 77 companies indebted to the taxman to the princely tune of $6.8 billion. This is highly disturbing but not surprising, as Nigeria suffers doubly from grossly low revenue collection and incompetence by its public officials.

Undoubtedly, the tax system remains crude and unable to keep pace with modern trends epitomised in technology use to detect leakages and mobilise revenue in real time. Defaulters act with impunity because of government’s carelessness. Corruption completes the mix. This results in inconsequential tax returns. OECD data puts Nigeria’s all-time high tax-to-GDP ratio at 9.6 per cent in 2011. In 2016, the first full fiscal year of Buhari’s presidency, it nosedived precipitously to 5.3 per cent. The dangerous trend has persisted all through his tenure.

The International Monetary Fund reckons that an economy requires a tax-to-GDP ratio of at least 12 per cent for viability. This means that without raising tax revenue, economic progress in Nigeria is a mirage. At an average of 33.8 per cent, all OECD countries meet the threshold. Denmark, which has the world’s highest tax-to-GDP ratio (46.3 per cent), deploys it among other first-rate social services in free university education for all EU citizens. In the eight months left of his tenure, Buhari should seriously implement an improved tax collection system by ensuring full compliance, widening the tax net, and punishing defaulters.

NEITI’s Executive Secretary, Orji Ogbonnaya-Orji, reiterates the indisputable fact that perpetual non-tax compliance is a financial crime. “Outside the country, if you don’t pay tax, you will go to jail. It is a very serious criminal offence, and nobody wants to be identified with such.”

NEITI’s report confirms Nigeria’s notoriously derelict tax system. This is a huge concern as the economy is witnessing severe revenue and foreign exchange crises. In 2019, Nigeria’s tax-to-GDP ratio, at 6.0 per cent, was short of the average for 30 African countries by 10.6 per cent.

Although VAT collection has improved after the rate was raised from 5.0 to 7.5 per cent in 2020, it does not change the financial dynamics. In 2019, total VAT collection was N1.18 trillion, compared to N1.53 trillion in 2020, and N2.07 trillion in 2021, said the National Bureau of Statistics. With inflation at double digits, these inflows do not significantly boost public finances.

There are still huge defaults in payments through the Treasury Single Account. Between August 2015 and February 2020, total accruals to the TSA were N19 trillion, according to the Office of the Accountant-General of the Federation. But for leakages and ineffective oversight, it could be much higher.

To the regime’s credit, policies like the Voluntary Assets and Income Declaration Scheme and the whistle-blower scheme began admirably. A tax amnesty policy, VAIDS generated N70 billion between 2017 and early 2020. But these days, VAIDS appears in abeyance. The whistle-blower programme, which led to the recovery of $178 million in the first two months of its inception in 2017; $43 million, £27,800 and N23.2 million in a flat at Ikoyi, Lagos, in 2017, is practically dead.

The Nigerian government is only paying lip service to taxation. This is manifest in the submissions of a former Finance Minister, Kemi Adeosun, and Vice-President Yemi Osinbajo. In 2018, they said only 914 persons in Nigeria — 912 based in Lagos, and two in Ogun — paid Personal Income Tax of between N10 and N20 million per annum. With all the multimillionaires/billionaires strutting around Nigeria, some zipping around in the latest private jets, this compliance level is abysmally low.

A 2022 report by global consultants, Henley & Partners, further exposes widespread tax evasion. It lists Lagos as the fourth richest city in Africa with 6,300 millionaires worth at least $1 million each. This is insightful. It adds that 330 people in Lagos own fortunes above $10 million; 20 have fortunes above $100 million; there are two who own $1 billion. This is only for Lagos. Other large cities in Nigeria have millionaires, who obviously, are not tax compliant.

This is an eye-opener for state governments, including Lagos, which is adjudged as the exemplar in IGR. Although total sub-national IGR rose by 35 per cent, from N1.31 trillion in 2019 to N1.67 trillion in 2021, this cannot be celebrated going by Henley’s report. Out of the taxable 68.8 million citizens and corporates, only 19 million paid PIT in 2018. As PIT is ideally, the bread and butter of state governments, they should promote new ideas on its collection.

The increasing reliance on borrowings to fund budget deficits creates serious dysfunction in the economy such that over 90 per cent of revenue is now being deployed in debt servicing. This leaves little for infrastructure and social investments.

The second alternative is equally counter-productive: increasing the tax rate, as in the case of VAT in 2020. This is a huge burden on the already overtaxed segments of the economy managing to stay afloat. The Nigerian Employers’ Consultative Association says its affiliates are overburdened by 50 different taxes, levies and fees. This is a myopic way to boost tax revenue.

Governments should expose, recover all outstanding taxes and prosecute persistent defaulters. There should be no sacred cows. This is the lesson from Spain, where superstar footballers like Lionel Messi and Cristiano Ronaldo were prosecuted and millions of dollars in backlogs recovered from them. Tax defaulters are also regularly fined and jailed in the United States.

As the era of sharing money at the centre by governments is ending, it imposes a great burden on officeholders to diversify revenue sources. Therefore, all tiers of government should reform the tax system. It is the modern means of running government, a global ideal that Nigeria should urgently imbibe.

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Business / FIRS Warns Mdas To Stop Contracting Tax Collections by naijacontacts4: 5:51pm On Sep 23, 2022
The Federal Inland Revenue Service has cautioned Ministries, Departments and Agencies of Government against the appointment of consultants and concessionaires to collect taxes due to the Federal Government or any of its agencies.

In a public notice seen by The Punch on Thursday, the FIRS said it remained the sole agency of government saddled with the responsibility of tax collection.

In the notice signed by its Executive Chairman, Muhammad Nami, the FIRS accused some MDAs of including functions of assessment, collection, accounting and enforcement of taxes and levies in their agreements with concessionaires and consultants.

“It has come to the notice of the Federal Inland Revenue Service that some Ministries, Departments and Agencies of Government (MDAs) are appointing concessionaires or consultants for the assessment, collection, accounting or enforcement of taxes and levies due to the Federal Government or any of its agencies.

“Some MDAs include such functions in their agreements with concessionaires or consultants,” the notice, which was released by the Special Assistant to the Executive Chairman on Media and Communication, Johannes Oluwatobi Wojuola, read.

Citing Section 68(2) of its Establishment Act, the FIRS highlighted that by law it was “the primary agency of the Federal Government of Nigeria responsible for the administration, assessment, collection, accounting and enforcement of taxes and levies due to the Federal Government or any of its agencies, except as may be authorised by the Minister responsible for Finance by regulation as approved by the National assembly.”

The notice also stated that while Section 12(4) of the FIRS Establishment Act had provided that the Service might engage consultants, accountants or other agents to carry out certain functions on its behalf, the law had expressly prohibited the assessment and collection of tax by consultants.

The statement quoted Nami as cautioning MDAs who were in the business of appointing consultants for tax assessment and collection that they were not just acting against the letters of the law, but were committing offences that were punishable under the FIRS Establishment Act as amended.

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Business / Tax Implications Of Disposal Of Shares In Nigeria by naijacontacts4: 5:33pm On Sep 23, 2022
Gains from disposal of shares are now subject to Capital Gains Tax in Nigeria. Capital Gains Tax ("CGT"wink is a tax charged on the disposal of chargeable assets. Prior to 1 January 2022,1 shares and stocks were not considered "chargeable assets". Hence, the sale of shares by a company whether undergoing restructuring or not was not subject to CGT. The Finance Act 20212 (the "Act"wink however amends the relevant provisions of the Capital Gains Tax Act ("CGTA"wink3 by introducing a new taxation regime regarding the disposal of shares in Nigeria. Gains accrued from the disposal of shares and stocks in Nigeria are no longer exempted from CGT4.

The Act provides that gains accrued from the disposal of shares worth at least N100,000,000 (one hundred million Naira) in a Nigerian company in any 12 (twelve) consecutive calendar months, are to be taxed at the rate of 10% (ten percent) except in any of the following instances5 –

the proceeds from the disposal of the shares are reinvested within the same year of tax assessment in the acquisition of shares in either the same or another Nigerian company, provided that if the entire proceeds are not re-invested in the shares of either the same or another Nigerian company, the proportion not re-invested shall be taxed at the applicable tax rate of 10%;
the aggregate of the proceeds of the disposal of the shares are less than N100,000,000 (one hundred million Naira) in any 12 (twelve) consecutive calendar months and the disposing entity renders appropriate returns to the Federal Inland Revenue Service (FIRS) on an annual basis; or
the shares are transferred between an approved borrower and lender in a Regulated Security Lending Transaction as defined under the Companies Income Tax Act ("CITA"wink6.
Thus, partial re-investment of the proceeds from the disposal of the shares shall attract tax proportionately to the part not reinvested, while transfer of shares under the regulated Security Lending Transaction is exempted. Importantly, re-investments of the proceeds of the disposed shares must be in a Nigerian Company and not a foreign company or in any other business entity (sole proprietorship, partnership, limited partnership, limited liability partnership) for this exemption to apply.

The CGTA also provides an exemption from the application of CGT in cases of transfer of shares in any re-organisation or restructuring between members of a recognized group where one entity has control over the other7.

The tax due in respect of the disposal of the shares are to be paid to the Federal Inland Revenue Service ("FIRS"wink if the disposing entity is a company and to the relevant tax authority under the Personal Income Tax Act i.e., the individual's relevant state inland revenue service, if the disposal is made by an individual.

With the introduction of Capital Gains Tax on share transactions, it is important for parties to such transactions to consider how the CGT due (if any), will affect the pricing conditions and tax provisions in the sale and purchase agreement they are parties to.

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Business / Governors Brainstorm To Block Tax Leakages, Improve IGR Collection by naijacontacts4: 5:49pm On Sep 20, 2022
The 36 state governors yesterday commenced a brainstorming session on how to improve their internally generated revenue (IGR) and block tax leakages.

Also, it emerged yesterday that states’ internally generated finances grew by 35 per cent from N1.31 trillion in 2019, to N1.67 trillion in 2021.

The governors also announced a new finance database that would enable them share information on tax reforms in order to improve their internally generated finances.

Addressing governors at a workshop yesterday, at “the 8th IGR Peer Learning Event and Launch of the Nigeria Governors’ Forum (NGF) Public Finance Database,” the chairman of the NGF and Governor of Ekiti State, Dr. Kayode Fayemi said the essence of the workshop was to find ways to improve tax collection and subsequently improve states’ revenue.

This was just as the Southern Governors Forum yesterday said it received with great relief the news of the resolution of the 19 Northern State Governors and Northern Traditional Rulers Council calling for the immediate establishment of State Police to address the continued insecurity challenges in the country.

Continuing, Fayemi who spoke at the NGF workshop said: “We have seen total IGR of states grow from N1.31 trillion in 2019, to N1.67 trillion in 2021, and the share of IGR (as percentage of total recurrent revenue) grow from 31 per cent in 2019 to 35% in 2021. While this is good progress, we must not lose sight of the need to sustain and advance the momentum of reforms, considering the decline in FAAC receipts.”

He said the workshop brought back a nostalgic feeling, saying it reminded him of a collective decision they took as governors in 2019, to be deliberate with reforming the tax administrations to become more efficient and effective.

He said consensus reforms were focused on ending multiple taxation; professionalising and modernising revenue services as well as embracing a taxpayer-centric culture that eases taxpayers’ compliance and strengthen the existing social contract.

Fayemi said the pact birthed the State Action Plan for Revenue Generation (SAPRG), whose implementation progress the governors examined with the objective of highlighting what had worked and what they needed to do better to foster an enabling tax environment and administration that allows them to optimise their revenue potential as sub-nationals.

In view of this, the Chairman of the governors’ forum added: “Our pursuit to do things differently has benefitted from the relentless efforts of our state officials, technical assistance programmes within our secretariat and partners’ support.

“Your collaboration and support have ensured we stay the course of implementation, delivering far reaching reforms, which have yielded the results we see today.

“Our renewed effort must take into consideration the emerging dynamics surrounding private income in Nigeria today, including the devaluation effect of the rising inflation rate, structural transition in employment, business dealings and investments, driven by the evolution of technology.

“Beyond the laws and regulations we have passed, we must occasionally by policy respond to the fast-changing tax environment, if we must stay ahead of evasion and avoidance tactics, recognise the need to support our internal revenue services and continue to empower them with the necessary political support and financial resources required for them to execute their mandate effectively,” the Ekiti State governor explained.

On how to improve their revenue base, Fayemi said, “Broadly, we must seek out ways to expand the tax net and improve our taxpayers’ database. This will require ending the proliferation of taxpayers’ identification numbers and databases. It is pertinent we harmonise; leveraging a unique identification number as is global best practice.”

Accordingly, he said, “For us to achieve this, information sharing between jurisdictions must be seamless, not only between the tiers of government but also inter and intra-state. I would like to encourage the Joint Tax Board (JTB) in its pursuit for a plausible solution to this anomaly.”

On strengthening public acceptability of tax collection, he said, “we have improved the transparency not just around tax revenues, but the entire treasury. Today our budgets and audited financial statements are not just publicly available, but also in citizen-friendly versions.

“This will be supported by the NGF Public Finance Database which we will be launching today.

“A database that allows users to easily filter and analyse states’ fiscal data and information. We understand the need to build greater accountability, especially showing citizens the linkage between their taxes and service delivery.

“We are working with our revenue services and other MDAs to expand our tax-for-service initiatives in rewarding compliance while ensuring citizens know where we expend their taxes annually”, the chairman of the governors’ forum stressed.

Speaking further, the outgoing Ekiti State governor said, “I am optimistic about the tax reform journey and believe even within the time some of us have left, we can achieve a lot. As is often said, government is a continuum, so I trust those after us to continue in these reforms and many more, as may be necessary in guaranteeing the fiscal sustainability of our states.”

With this, he said, “I officially launch the Nigeria Governors’ Forum (NGF) Public Finance Database – Nigeria’s first reference database for State-level public finance data.

“This database reiterates our commitment to fiscal transparency and accountability as well as our resolve to strengthen governance in the country. We welcome your continuous support.”.

In his speech earlier, the Director General of the NGF, Asishana Okauru, said the global finance database was Nigeria’s first open-source database of the fiscal data of the 36 state governments.

He further said the portal would host comparable annual data on government spending, revenues and financing in all states and would feature hundreds of performance indicators that measure the quality of public spending and the intersection of public financial management and service delivery in the country.

Okuaru said the technical sessions of the event would focus on the three primary tax reforms seen as essential for all states – the implementation of state Consolidated Revenue Codes (CRCs), autonomy for tax authorities and tax-for-service programmes.

“These reforms, when properly integrated in the tax administration system, are capable of scaling up effective organisational management, the quality of taxpayer services, taxpayer compliance and tax revenues,” he stated.

Southern Govs Hail Northern Counterparts, Traditional Rules on Call for State Police

Meanwhile, the Southern Governors Forum (SGF) yesterday said it received with great relief the news of the resolution of the 19 Northern State Governors and Northern Traditional Rulers Council to call for the immediate establishment of state police to address the continued insecurity challenges in the country.

The Northern Governors Forum had on Monday, September 12, 2022, met with the Northern Traditional Rulers Council in Abuja, and came out with a resolution calling for the establishment of state police to tackle security challenges in the region and the nation at large.

The SGF reacting through a statement signed by its Chairman, and Governor of Ondo State, Mr. Oluwarotimi Akeredolu, explained that the decision of the northern governors to support the call for constitutional amendment to reflect the current realities could not have come at a better time than now when the confidence in the capacity of the federal government to secure the country appears shaky.

The statement read: “All patriots must salute the courage of the 19 Northern Governors and the Northern Traditional Rulers Council for their stance at this crucial moment in the country.

“We, on our part at the SGF have continued to reiterate the fact of the incongruity inherent in an arrangement which purports to be federal, nominally, but whose observances stand at variance with the best practices espoused by climes considered advanced and progressing, amenable to nuances and adaptations which reflect and accommodate the yearnings for inclusion of the component units.”

The governors stated that they would continue to insist on the creation of state police as the only logical and pragmatic solution to the pervasive problem of insecurity in the land.

“In addition to this, we shall not fail to renew the call for the adoption of policies geared towards real devolution of powers to the federating units indeed. This is the surest path to peace and progress,” the SGF added.

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Business / Organised Private Sector Battling Over 50 Taxes –NECA by naijacontacts4: 3:54pm On Sep 19, 2022
The Director-General of the Nigeria Employers’ Consultative Association, Mr Adewale Oyerinde, has said that organised businesses are presently faced with over 50 different taxes, levies and fees at all tiers of government, some of which are duplicated.

A statement said while speaking in Abuja, Oyerinde said additional taxes and stringent regulatory environment were threatening the organised private sector.

He added that currently, there were over five different bills at the National Assembly which sought to impose taxes on organised businesses, in addition to the notable taxes and levies which were of general application.

He said organised businesses should not be made to suffer the lack of proper economic planning and political will that have pervaded successive administrations.

The director-general said, “While debt and paucity of revenue are challenges that are acknowledged, organised businesses should not be made to suffer the lack of proper economic planning and political will that have pervaded successive administrations.

“At the last count, organised businesses are presently faced with over 50 different taxes, levies and fees at all tiers of government, some of which are duplicated.

“Currently, at the National Assembly, there are over five different bills, which seek to impose various taxes and levies on organised businesses in addition to the notable taxes and levies which are of general application, such as The National Information Technology Development Levy, Education Tax (or Tertiary Education Tax), National Social Insurance Trust Fund, Company Income Tax, Television and Radio License Fee, Local Content Levy, Stamp duty, among others.

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Business / FIRS Blames Fragmented Tax Systems For Nigeria’s Revenue Challenges by naijacontacts4: 4:05pm On Sep 15, 2022
The Executive Chairman of the Federal Inland Revenue Service (FIRS), Muhammad Nami has said Nigeria is currently suffering revenue challenges because of its fragmented tax systems and agencies.

According to him, this issue has led to significant tax revenue losses for the country.

Speaking during the Senate Stakeholder engagement and public hearing on the 2023 Medium-Term Expenditure Framework (MTEF) and Fiscal Paper, which was held at the Senate Chambers, Nami said: “In Nigeria, we have 774 Local Governments, each of them has a tax authority; each of the 36 States, too, has revenue authorities with their respective mandates; then we have the FIRS and Customs. What I would advise for efficiency and to do things in line with global best practices, is that we should amend our tax laws to harmonise the tax agencies and tax system.

“With this, when the FIRS, for instance, visits ‘Company A,’ it can serve one assessment on the company, and also on the individual that owns the Company; it can also ask the company to account for the VAT it has collected, and ask for PAYE it has deducted from its employees as well as the Personal Income Tax of the Promoters of the Company.

“This is currently not the case, and as such has created a huge gap in our tax system.”

He described the Road Infrastructure Tax Credit Scheme as one of the greatest innovations of the federal government in its resolve to tackle Nigeria’s infrastructure deficit.

The scheme provides for public-private partnership intervention in the construction, refurbishment and maintenance of critical road infrastructure in the country with participants being entitled to Tax Credits against their future Companies’ Income Tax.

“I think one of the greatest innovations of the government of the day is Executive Order 007, which was signed into law in 2019. “I want to speak to the one we are handling jointly with the NNPC. The NNPC through its subsidiary for instance is investing in about 1,824 kilometres of roads across the six geopolitical zones in Nigeria.

“Some of these roads had been constructed as far back as 1976. I could remember when I was still rounding up my primary school education, the road that leads Suleja to Lapai-Agaie-Bida was constructed by a company called DTV.

I am not aware of any significant work done on that road 40 years later, only until now when the NNPC is using Executive Order 007 to reconstruct the road, he said.

According to him, from December 2021 to July this year, the contractor completed the reconstruction of well over 50 per cent of that road.

“The challenge of road construction in Nigeria has always been funding. Yes, there are contracts for the construction of roads, but funding these constructions is a challenge.

“The road leading from Suleja to Minna for instance was awarded some 11 years ago to a company for over N20 billion. Ironically, the annual budgetary provision in our National Budget every year stands between N150 million to N200 million per annum. If we are to complete that road, going by the annual budgetary provisions it would take an average of 35 to 40 years before we finish it.

“I can confirm to the Chairman that with Executive Order 007, NNPC is now providing funds and in the next two to three years that road will be completed. This is an important innovation of the government and I would plead with this distinguished Committee of the National Assembly to support the government on it,” Mr Nami noted.

Corroborating the position of the FIRS Executive Chairman, the Minister of Finance, Budget and National Planning, Hajia Zainab Shamsuna Ahmed explained that the tax credit was only provided to the beneficiaries after completion of the construction work, and not before.

She noted that several companies had indicated an interest in carrying out construction and rehabilitation of roads under the scheme across the country, adding that while some of these companies had commenced work, others were yet to as they were still finalising some of the documentation requirements such as Bill of Quantities.

The Senate Finance Committee, led by Senator Solomon Adeola charged the Federal Government through the Ministry of Finance and members of the government’s economic team to explore novel strategies that would shore up revenue for the Federal Government, including restructuring the remitting formula for Government Owned Enterprises (GOEs).

The Committee urged the Federal Government to consider a situation where Government Owned Enterprises (GOEs) remit 100% of their revenue to the government while being funded by a determined percentage of cost of collection, as is the case with the FIRS and Customs.

Arguing for this, the Committee opposed the current situation where some government agencies were retaining hundred per cent of their revenue, spending from it, and paying government operating surplus.


The Committee recommended that these GOEs should keep only 5 to 15 per cent as their cost of collection from the revenue generated to cater for their salaries, operational expenses and capital expenditure as is currently done by the Nigerian Customs and FIRS, while remitting the difference of 85 to 95 per cent of their gross earnings as against the current practice of operating surplus where they spend between 70 and 90 per cent of their gross earnings.

The Committee noted that this also has the capacity to make them put in more effort to improve their revenue when compared to the FIRS and Customs.

The Committee further urged the Federal Government to apply the same logic to the running of government-owned universities by providing funding for only research and infrastructure needs through the Education Tax already being administered by the FIRS, while allowing the Vice Chancellors to use the revenue from school fees and other innovative revenue sources to run the Universities.

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