The Federal Inland Revenue Service (FIRS) on Monday said it collected over N10tr tax revenue in the year 2022, its historical high, excluding the N1,805,040,163,008 tax waived on account of various incentives granted under the respective laws by the Federal Government.
The 2022 tax collection which surpassed the N6.405tr recorded in the 2021 fiscal year by 57.68% was over 100% of its collection target for 2021.
In 2022, building on the success of the preceding year, the Service said it achieved a record collection of N10.1 trillion, being over 96% of its collection target for the year, and the first time the Service will cross the ten trillion mark.
According to the FIRS Executive Chairman, Muhammad Nami in the Performance Update Report, after briefing President Muhammadu Buhari, “in the year 2022 collected a total of N10.1tr, with oil contributing N4.09tr 40.49%; and non-oil, N5.96tr or 59% of revenues, representing 96.74% of the year’s N10.44tr target.
Continuing, he said “Companies Income Tax contributed N2.83tr; Value Added Tax N2.51tr; Electronic Money Transfer Levy N125.67bn and Earmarked Taxes N353.69bn.
“Non-oil taxes contributed 59% of the total collection in the year, while oil tax collection stood at 41% of total collection,” the report.
The service further added that included in the total revenue sum is the N146.27bn 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.
Providing perspective to this unprecedented tax collection, the FIRS noted in the Performance Update that the 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.
“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 are working in unison towards the achievement of set goals.
“As a result of conducive environment created for staff, officers of the Service are pulling their weight on the global stage with international recognitions and awards.
“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 this year without having to visit FIRS office,” the report noted.
It also noted that the Service had operationalised its data mining and analysis system thereby allowing for data-backed taxpayer profiling.
Other reforms the Service introduced in this period focused on the detoxification of the tax environment by ridding it of mutual mistrust, negative tax morale, and tax evasion, through effective taxpayer education, open engagement with stakeholders and improved services.
It noted that it is courtesy these reforms, framed around the four-focus points that the Service was able to achieve this collection.
Nami, Executive Chairman of the FIRS, commenting on the N10.1 trillion record tax collection achieved under his leadership stated that this was made possible through “dogged implementation of strategic reforms over the past two years; a renewed commitment by officers of the Service, accompanied with a boosted morale; as well as the innovative deployment of technology for automation of both tax administration and operational processes.
“This collection was possible through collaboration with our stakeholders, from our colleagues at the Executive branch of government, to the members of the judiciary, to our brothers and sisters at the National Assembly, as well as the tax advisory committee, professional bodies, unions, and most crucially our taxpayers.”
Speaking on the outlook for 2023, Mr. Nami stated that the Service would build on the current reforms, achieve full automation and continue to establish a resilient Service that would continue to provide sustainable tax revenue to fund the government.
“We intend to maintain, and even improve on the momentum in 2023,” he stated.
“We have peaked, but this is not certainly our peak. In fact, my hope is that this would be the least sum the Service would ever collect going forward.
“Our goal is to identify more areas where we can improve on in the delivery and efficiency of our collection; and plug loopholes, while deploying innovative reforms in data and artificial intelligence.
“Ultimately, we believe that the FIRS can shoulder the responsibility of providing revenue needed for the governments across the Federation to cater for the needs of the Nigerian people through taxes.
“This is feasible once we get the much-desired support from the three tiers and arms of government, as well as all stakeholders.”
The FIRS appreciated President Muhammadu Buhari, as well as the Minister of Finance, Budget and National Planning, Mrs. Zainab Ahmed and the Minister of State, Clem Agba, for their support.
“FIRS Management uses this medium to commend all patriotic taxpayers who paid their taxes correctly, stakeholders for their support, and officers of the Service for their dedication to duty.
“The Service equally owes its achievements in 2022 to effective leadership of the Honourable Minister of Finance, Budget and National Planning – Mrs Zainab Ahmed, her brother, the Minister of State – Mr Clem Agba, members of the National Assembly and the fatherly support of the President and Commander-in-chief of the Armed Forces of Nigeria – Muhammadu Buhari.”
This is the second consecutive year that the Service will be recording unprecedented tax collection.