Executive Chairman, Federal Inland Revenue Service (FIRS), Mr Tunde Fowler has said that Nigeria will earn at least 80 per cent of her revenues from the non-oil sector of the economy in the next three years.
Fowler who spoke today at the Nigeria-Canada Investment Summit in Abuja noted that the non-oil sector contribution to the Nigerian economy has risen to 60 per cent by November 2019 from 54 per cent in
He also noted that the continuous drop in the oil prices is a sign that attention should be focused on the non-oil sector of the economy which he said is more sustainable.
“We are moving from oil dependent to non-oil dependent economy. We believe that in the next three years, the non-oil sector is going to contribute at least 80 per cent of the total revenue. You may ask
where is that going to come from. It is going to come from Agriculture”, he said.
He said the strategies that FIRS is adopting to realise improved revenue collection are: “auto VAT Collection: there is automation of VAT collection in key sectors which facilitates reduction in compliance cost in the long term; there is system to system integration between banks and FIRS; VAT collection in the banking sector went live in January 2017 and from Jan-Oct 2019 collected N25.6bn so far; VAT collection in the Cable TV sector went live in Dec 2018 and generated N5.1bn so far from Jan-Oct 18 2019.
“Integrated Tax Administration System (ITAS) project is a suite of programs that enables the automation of FIRS tax processes. As part of the Service’s objectives to bring high-level efficiency to tax revenue collection and provide first class services to taxpayers, ITAS project introduced SIGTAS, a solution that covers all aspects of tax administration in one integrated system.
“Government Information Financial Management Information System (GIFMIS) is an interface linking FIRS to the OAGF for real-time exchange of information and data; State Offices of Accountant General
Platform (SAG); Automated the deduction at source and remittance of VAT and WHT from State governments contract payments directly to FIRS’s account and so far collected N13bn”, he said.
He noted that the deployment on online solutions, is making tax administration more efficient, transparent and convenient
Some of the FIRS services which could now be accessed electronically are: taxpayer registration (through e-Registration); payment of Stamp Duties (through e-Stamp Duty); payment of taxes (through online payment: e-tax pay); receiving of electronic receipt after payment of taxes (through e-Receipt); filing tax returns (through e-filing) and online Tax Clearance Certificates (TCC) through electronic Tax Clearance Certificate (e-TCC).
Fowler who also spoke on various tax incentives in Nigeria said Nigeria needed award on the international scene on the number of reliefs and incentives it grants to both local and foreign businesses.
“Sometimes when I look at these tax incentives and reliefs, I feel that Nigeria is the Father Christmas. But that is necessary for the growth of the economy because they attract investors”, Fowler said.
He urged foreign investors to consider Nigeria as their first option because of attractive tax incentives and reliefs and attractive end-price.
Fowler said there are attractive tax incentives and reliefs in Personal Income Tax Act, Companies Income Tax Act, Capital Gains Tax Act, Value Added Tax Act, agriculture and foreign investment.
For instance, under the Personal Income Tax (PIT), Fowler noted that the following tax reliefs are provided by the Personal Income Tax Act (PITA).
“There is Tax Credit Allowance. Tax credit allowable against tax payable on income derived from outside Nigeria if brought into the country through Government approved channels;
“Consolidated Relief Allowance. Section 33 (1) of PITA allows a Relief Allowance of N200,000 subject to a minimum tax of 1% of gross income whichever is higher, with the balance taxable in accordance with the Income table in the Sixth schedule to PITA.
“Returns Not To Be Filed Where Income Is N30,000 or Less. Section 43 PITA provides that no return of income shall be filed by a person whose only source of income in any year of assessment is employment in which he earns N30,000 or less from that source.
“Income Exempted. Section 19(1) PITA specifies several incomes that are exempted from tax, in the Third Schedule to the Act.
“Exemption of Interest on Loan Granted by Banks: Section 19(7) PITA exempts interest on any loan granted by a bank to a person engaged in: (a) agricultural trade or business; and (b) the fabrication of any local plant and machinery.
“Exemption of Dividend from Tax: The Third Schedule to PITA lists incomes exempted from Personal Income. Tax Paragraph 25 of the: Third Schedule to PITA exempts some dividends from tax”, said Fowler.