Finance & EconomyNews

FIRS hits 98% of target as it collects N4.95 trillion for 2020 fiscal YEAR

The Federal Inland Revenue Service (FIRS) has announced that it generated N4,952,243,711,728.37 as tax revenue in the 2020 fiscal year.
This is about 98% of the tax target of N5.076 trillion that was set for the FIRS by the Federal Government, despite the economic challenges of 2020 caused by record low oil prices and the outbreak of the coronavirus pandemic.
This disclosure was contained in a statement which was issued by the Director of Communications, FIRS, Mr Abdullahi Ahmad, on Tuesday in Abuja.
According to a report from the News Agency of Nigeria (NAN), Ahmad in his statement quoted the Executive Chairman of the Service, Mr Muhammad Nami, as saying that this performance was remarkable, considering the devastating impact of Covid-19 on the Nigerian economy.
He pointed out that some of the factors that negatively affected the operations of FIRS last year include, record low oil crude oil prices globally, business disruptions and lootings during the violent #EndSARS protests and the generous tax waivers granted to businesses to ease the impact of the Covid-19 lockdown.
He also said that additional tax exemptions granted to small businesses in the 2019 Finance Act and insecurity in some parts of the country were other factors that affected collections.
In the analysis of the significance of the 2020 performance, the FIRS Chairman said that the oil revenue which used to contribute over 50% in tax returns through the Petroleum Profits Tax in previous years, accounted for only 30.6% of the tax revenue generated in 2020 due to low oil prices.
He also pointed out that the non-oil tax collection, which was 109% in 2020, was 9% higher than the previous year and attributed these achievements to many reforms initiated by the board and management of FIRS under his leadership.
He said, “The conscientious taxpayers in the country and dedicated members of staff of the FIRS nationwide for their support and devotion to work made this performance possible despite the numerous obstacles encountered in 2020.
“The FIRS is optimistic that this current fiscal year will be better than in 2020. We shall perform well, given that our service reforms are expected to yield greater dividends, especially as different parts of tax administration are being automated.’’
“We are also optimistic that exploration activities will improve in the oil sector and increase the prospect of higher tax revenue from the sector.
“Similarly, the ongoing reforms together with increased stakeholder collaborations will brighten the prospect of improved voluntary compliance and consequently higher tax revenue generation for the country this year and beyond.’’

What this means

This means that despite the unprecedented crisis in the oil sector due to the impact of the coronavirus pandemic, the non-oil sector performed beyond expectation in terms of tax collection.

This was made possible by incentives granted by the revenue agency to encourage taxpayers to voluntarily fulfil their obligations towards the government in addition to some reforms to aid efficient and effective tax collections.

Some of these reforms include the deployment of technology for tax operations, capacity building for staff, improved welfare for staff and so on.

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