The Federal Inland Revenue Service (FIRS), on Thursday, said it collected a total of N6.405tr in both oil and non-oil taxes for the year ended 2021, representing 100% of its target for the period, compared to the previous year’s N4.952tr, or 98% of the Federal Government’s N5.076tr tax target.
A breakdown of the FIRS 2021 Performance Update signed by Executive Chairman, Muhammad Nami, showed that non-oil continues to dominate collection efforts, accounting for N4.396tr, or 68.64%, while oil collections contributed N2.008tr, or 31.36% of the total collection, despite what he termed the limitations faced in 2020/2021 by the Service. Recall that in the 2020 fiscal year, oil contributed 30.6%, while non-oil, the collection grew by 109% in 2020, 9% higher than in 2019.
A further breakdown of the 2021 figure, released by Johannes Oluwatobi Wojuola, Special Assistant to the Executive Chairman, FIRS (Media & Communication), revealed that “Companies Income Tax amounted to N1.896 trillion; Petroleum Profits Tax amounted to N2 trillion; Value Added Tax amounted to N2.07 trillion; Electronic Money Transfer Levy amounted to N114 billion; earmarked Taxes amounted to N208.8 billion; among others,” he added.
The report showed that tax collections grew from N4.028tr in 2017, to N5.321tr, dropping the following year to N5.263tr, and further down to N4.951tr, in 2020, before last year’s recovery at N6.405tr. Meanwhile, the contribution of the oil sector has remained below 40% since 2017, except for 2018 when it stood at 46%, and 40% the following year.
He listed some of the limitations as the global economic challenges occasioned by the Coronavirus pandemic, as well as the disruption of business activities in 2020 by nationwide protests tagged #EndSARS.
“The Service issued certificates for the sum of N147.8bn tax credit to private investors and NNPC (Nigerian National Petroleum Company Limited) for road infrastructure under the Road Infrastructure Development Refurbishment Investment Tax Credit Scheme created by Executive Order No. 007 of 2019,” he added.
The report explained that “in line with the law, 2021 income tax revenue is a function of the outcome of business activities in 2020.
“In that year, the country entered into a second economic recession within 5 years. The recession was occasioned by 5-months of lockdown caused by the Coronavirus pandemic. To compound the economic challenges of COVID-19 pandemic, business activities were disrupted by the End-SARS protests.”
The statement further noted that the deployment of technological tools was a game-changer for the Service.
“Upon the coming into office of the current management, the Federal Inland Revenue Service (FIRS) began strategic administrative and operational reforms; and the implementation of new policies that would improve its capacity towards the fulfilment of its mandate.
“The deployment of a new automated tax administration system, the “TaxPro Max” in June 2021 was a game-changer. With the solution, taxpayers experienced the ease of registration, reporting, payment, and issuance of Tax Clearance Certificates while the Service experienced greater efficiency in the deployment of resources thereby leading to improved revenue collection.”
The FIRS stated that strong opposition to its statutory mandates by certain interests posed a major setback in the full implementation of its reforms.
