The Federal Government has placed the responsibility of generating revenue for providing national security and infrastructure development in Nigeria on the Federal Inland Revenue Service (FIRS).
This comes amid heightening insecurity in the country amid calls for better infrastructure and social services.
Indeed, the Service is also charged with finding innovative ways to reform tax administration and raise public revenue to effectively finance the National Development Plan (NDP) 2021-2025.
Minister of State, Budget and National Planning, Clem Agba, said this yesterday in Lagos, during the 2022 Corporate Retreat of the FIRS, themed: “Consolidating on the Gains of the FIRS Reforms: 2019 to Date.”
In his Keynote Address at the opening of the two-day retreat, Agba reminded the Service that “The financing of the NDP will rely heavily on domestic resource mobilization, especially from non-oil revenue sources,” in which it also plays a critical role.
He said: “Every aspect of our national development – security, infrastructure, social services, business-enabled environment, etc. depends on the national budget, and the ability of the government to provide these depend on available revenue.
“The onerous task of generating the required revenue rests squarely on the shoulders of the FIRS.”
Every aspect of our national development – security, infrastructure, social services, business-enabled environment, etc. depends on the national budget, and the ability of the government to provide these depend on available revenue.
Mobilizing domestic funds
Noting that the government’s revenue profile has been seriously challenged in the recent past due to multiple factors, the Minister argued that concerted efforts are required to prioritize expenditure, with emphasis on resource mobilization.
“In this context, the task of improving Nigeria’s tax revenue collection and funding position is urgent, and it is a task that must be done without fail,” he added.
Besides, he continued, “Recent happenings in the global economy are compelling nations to shift from dependence on resource wealth, particularly hydrocarbons, to more innovative sources for revenue mobilization.
“As the campaign for cleaner energy gains momentum and widespread support, it is resulting in lower new investments in exploration and production activities in the upstream petroleum industry.
“For instance, aggregate investment declined from $525billion in 2019 to $341billion in 2021, while investment in wind, solar and other renewable sources is soaring.”
Against this backdrop, Agba said the Federal Government established the Strategic Revenue Growth Initiative (SRGI), and the annual Finance Act, “to mobilize domestic funds necessary for human capital and infrastructure development that are both drivers and enablers of sustainable economic growth and development.”
He said the SRGI identified about 47 Strategic Revenue Growth Initiatives across three thematic areas “to achieve sustainability in revenue generation, identify new revenue streams, and enhance the enforcement of existing ones as well as achieve cohesion in the revenue ecosystem.”
Of this 47, FIRS is saddled with some deliverables including improving tax collections; closing legal loopholes; broadening the tax base; expanding and improving value added tax (VAT); improving tax compliance; and aligning stakeholders on a single purpose, among others.
He therefore said the retreat presents an “opportunity for self-appraisal in terms of meeting set goals, achievements and challenges with a view to developing strategies for future and better performance.”
In this regard, he congratulated the Service for achieving the collection feat of 2021 with over 100% revenue target and crossing N6.405 trillion tax revenue threshold for the first time in Nigeria, especially as almost 70% of the collection came from non-oil sources.
The strategies we would design here would also be underpinned by our objectives of rebuilding the institutional framework of the Service, making it a customer-centric and data-centric institution and improving our relations with stakeholders.
The Executive Chairman, FIRS, Muhammad Nami, in his welcome address said the Retreat aimed “to review the successes, set goals for ourselves and the Service, and to build the needed capacity to achieve them,” which he said rest on 5Cs – Communication; Camaraderie; Cooperation; Coordination; and Capacity.
In proffering solutions to the identified challenges facing the Service, he said: “It is imperative to put on our thinking cap to generate ideas and sustainable strategies to achieve the goals we set for ourselves.
“The strategies we would design here would also be underpinned by our objectives of rebuilding the institutional framework of the Service, making it a customer-centric and data-centric institution and improving our relations with stakeholders.”
Nami added that the retreat is also a “time to recognise and reward passionate, responsible and hardworking staff, who have distinguished themselves in their diligence and service at the FIRS … to serve as a morale booster and motivation to other staff.”
In his Goodwill address, the President, Chartered Institute of Taxation (CITN), Adesina Adedayo, noted that “Without a doubt, taxation has proven to be a veritable tool for sustenance of economies both in developed and developing countries.”
As a result, he said “It is imperative to appreciate the role of taxation and strive to improve the system of administration and collection for a positive outcome.”
He added that previous retreats have yielded positive results over the years, and “has impacted positively in the area of governance of the Service.”
He also underscored the role of technology, saying that digitalization should be the driving force for tax collection.
“The deployment of the ‘TaxPro Max’ in June 2021, and the deployment of other technological tools for seamless transactions for the taxpayers have further proved that the Service is moving in the right direction towards achieving its goals,” he said.