Acting Chairman Federal Inland Revenue Service (FIRS) Zacch Adedeji has said there is need to improve tax revenue collection if the country is to reduce its reliance on borrowing and ensure financial stability.
Adedeji, who said this Monday at the handing over ceremony in Abuja, added that technology would play a critical role in his trust to stabilise government’s finances.
He said with the government spending 96 per cent of its revenue on debt servicing, improving tax revenue collection was not negotiable.
“Our aspiration is audacious – to surpass Africa’s average tax-to-GDP ratio of 16.5% and achieve an impressive 18% within three years. By doing so, we aim to reduce our nation’s reliance on borrowing and ensure financial sustainability.
“This stark reality necessitates swift and resolute action on our part. We cannot afford to delay; we must act decisively to reverse this concerning trend.
“Our overarching goal is to nurture voluntary tax compliance by establishing a modern, dependable tax system that gamers the trust and admiration of all stakeholders. Through this, we hope to create an environment where taxpayers willingly fulfil their civic duties.
“A fundamental aspect of our mission is to elucidate to taxpayers why their civic duty matters. We are committed to simplifying our tax system, making it accessible and comprehensible, thereby facilitating voluntary tax payments and fostering a sense of civic responsibility.
“Quality data will be the cornerstone of our operations, enabling us to measure our progress, make informed decisions, and maintain the highest standards of accountability. We recognise that data-driven strategies are essential to our success,” said the new FIRS boss.
While stressing his resolve to aggressively drive compliance, Adedeji said: “For those who deviate from their tax obligations, be rest assured, we will enforce our responsibilities judiciously.”
He said his “administration will implement a robust enforcement model that effectively deals with tax evaders while maintaining fairness and transparency in the processes of the Service.”
“I pledge to maintain an open-door policy, actively engaging with stakeholders to collaboratively construct a tax administration that we can all take pride in. Together, we will build an institution that serves as a beacon of excellence,” said Adeyemi, a former finance commissioner in Oyo state.
Our achievements – Nami
In his remarks, the outgoing FIRS Chairman, Muhammad Nami, said the Service generated the sum of N8.5 trillion between January 1 and September 14, 2023.
Nami said he implemented reforms that improved the operations of the FIRS in line with the mandate given to him when he took over in December 2019.
Nami noted despite the situation on ground he was able to drive reforms that successfully altered the tax revenue mix in favour of non-oil taxes.
“The environment we met on ground in 2019 was characterised by weak administrative structure, inefficient processes (mostly manual), adversarial labour relations, insufficient funding with serious funding gaps, mutual mistrust between staff and management, etc. The net effect was low staff morale, the Service struggling to fulfill its mandate, suboptimal performance, inadequate revenue to prosecute government programmes and low tax-to-GDP ratio,” he said.
“The Service is on track to set yet another record in 2023 as it collected over N8.5trillion (cash) from 1st January to 14th September and have assessed, reconciled and recovered over N4 trillion outstanding tax liabilities and sequestered funds from NNPC on behalf of the Federation. This total sum of over N12 trillion is exclusive of amounts invested by our taxpayers under the Road Infrastructure Tax Credit Scheme and tax implications of waivers by the government from January, 2023 to date,” he said.
With the NNPC Limited putting a stop to its Federal Accounts Allocations Committee (FAAC) contribution from January 2022, analysts noted that tax revenue became the mainstay of distributable revenue by the committee
