Though the amount collected represents 60.77 per cent of the N8. 8 trillion target of the FIRS for 2019, Fowler is optimistic that FIRS will do better than the N5.3 trillion it collected last year.
At the 2020 National Budget hearing before the Senate Committee on Finance, Comptroller General Customs, Rtd. Col. Hameed Ali said the closure of Nigerian borders to a deluge of imports is not solely about revenue.
Rather it’s about the protection of Nigerians from bandit, illegal drug importers and merchants dumping expired rice and other products on Nigerians. “Even at that, we are not doing badly since we closed the borders. Before we closed the border, we were doing N4. 7 billion daily. Now, we realise N5.8 billion daily. But it is more than that.
Fowler on the other hand challenged Senators to have the courage to pass legislations that will send tax evaders to jail. If they do, he said, the over 40,000 taxpayers who have between N100 million and N 1billion as turnover in their accounts, who are not paying taxes will quickly pay their taxes. “Just a little over 3000 of the taxpayers who have lien on their accounts have paid N102 billion. In Nigeria, if you have the courage to pass laws that will send tax defaulters to jail, the 40,000 tax defaulters will pay.
“In terms of whether revenues cannot be generated by enforcement, we have gone over various programmes to bring people into the tax net. Before this in 2016, there was a tax amnesty in which 5000 companies came through and they also paid N92 billion within 45 days. VAIDS was also N90 billion. And it took one year. The question I’d like to ask you is, can N90bn make a difference in a developed or even a developing country? It will make a lot of difference. These are businesses or individuals that have income but had refused to pay taxes. Currently, we have close to 40, 000 of those accounts under lien for which they have not paid any taxes
Fowler contended that it is not true that Nigeria has not given or is not giving incentives to small businesses.
“I will first start with incentives. It was true that the past government, the government before this one did give a lot of incentives. And if you look at history of business and incentives regardless of which country you are in, businesses do no grow because of incentives, they grow because they believe that they can make profits and of course, they want certainty. But in terms of incentives for the small scale businesses with turnovers of N25 million and bellow, within the Finance Bill that has also been submitted for approval, there is recommendation to reduce the Companies Income Tax (CIT) rate from 30 percent to 20 percent.
“Over the last few years, from 2015, we had waived all interests and penalties for small scale businesses that did not remit taxes or up-to date with their filing. Also, we have decided with the Ministry of Finance and government to assist the small scale businesses and I believe that the office of the Vice President did indicate through the President that we’d try to make sure that there is a policy that 40 percent of local expenditure is given to local businesses which includes the small scale businesses.
“In terms of production, Yes. Production activities creates employment. Employment creates more tax revenue. For you to be in a state of production, you need infrastructure.
So, the question is, what comes first, the chicken or the egg. The Government needs funds to provide the infrastructure that would be conducive for business. And of course, once it is conducive for business, tax revenues will come in. we have to look at most of them side by side.
“Kindly note that our budget for 2019 was raised by ₦2.02 trillion representing 30.4% increase over the 2018 budget i.e. ₦6.747 trillion in 2018 to ₦8.8 trillion in 2019. Our total tax collection to date represents 78.2% achievement of corresponding budget of 2018. Based on the collection, we expect total collection to equal ₦5.4 trillion by end of 2019.
“We are pleased to report that our drive towards developing more sustainable sources of tax revenue by shifting the focus from oil revenue to non-oil is also yielding positive results. Non-oil revenue collection for January to September, 2019 stands at ₦2.423 trillion representing 72% achievement of non-oil target for the period while Oil revenue collection of ₦1.588 trillion represents 49% achievement to target for the period. The total collection contribution in 2019 shows a percentage ratio of 61% for Non-oil revenue to 39% for Oil revenue, while Non-Oil collection for January to September, 2019 grew by 13% over the Non-oil collection for the corresponding period in 2018.
“Please note that the noticeably low inflow of revenue from PPT for 2019 thus far, is as a result of shortfall in PPT estimates filed by the International Oil Companies (IOC). This is resultant from huge losses carried forward and tax incentives arising from the Modified Carried Agreements (MCA) by Joint Venture (JV) partners, unutilized Investment Tax Credits carried forward by the Production Sharing Contract (PSC) contractors which subsequently reduced the profits available for Petroleum Profit Tax (PPT). This is further compounded by production constraints which has continued to fall below the projected figure of 2.3 million bpd for the year.
“The target for FIRS as provided in the MTEF which is before the National Assembly is ₦8.5 trillion.
The FIRS Chairman listed the strategies being implemented towards attaining the N8.8 Trillion target as follows: ICT Initiatives, Compliance and Enforcement Initiatives, International Tax Initiatives, Tax Amnesty Programme and Expansion of taxpayer database and other Initiatives