The Federal Inland Revenue Service (FIRS) on Tuesday, said it collected a total N4,952,243,711,728.37 tax in 2020.
This figure represents 98 percent of the national tax target of N5.076 trillion set for the FIRS by the Federal Government.
At a briefing in Abuja, FIRS Executive Chairman, Mr. Muhammad Nami said: “This near 100 percent collection feat was all the more remarkable when placed against the backdrop of the debilitating effects of COVID-19 on the Nigerian economy.’’
Besides, other unforeseen factors like the low price of crude oil in the international market; business disruptions and lootings during the #EndSars protests; generous tax waivers granted by the FIRS to ease the impact of the COVID-19 shutdown; additional tax exemptions granted to small companies in the 2019 Finance Act; and insecurity in some parts of the country were identified as the reason the FIRS did not meet its target.
“Oil, which used to contribute over 50 percent in tax returns through the Petroleum Profits Tax in previous years, accounted for only 30.6 percent contribution to the tax revenue generated in 2020,” the FIRS boss said.
He added that the non-oil tax collection was 109 percent last year, which is nine percent higher than the previous year.
According to Nami, the revenue generation feat achieved in 2020 could be attributed to the various reforms initiated by the Board and Management of the Service. These include the capacity building for staff members, improved staff welfare package, promotion and proper placement of staff, deployment of appropriate technology for tax operations, segmentation of taxpayers to ease tax compliance; continuous collaboration with relevant stakeholders, among others.
He expressed the optimism that the FIRS will perform better in the current fiscal year than last year. He hinged this optimism on the assurance that the Service’s reforms are expected to yield greater dividends, especially as different parts of tax administration are being automated.
Nami said the Service is “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 by the Service 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.”
