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Poor tax collection: Fowler replies Buhari’s query

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The Chairman of the Federal Inland Revenue Service (FIRS), Babatunde Fowler, has responded to a memo from Abba Kyari, the chief of staff to the president, who said there were significant variances between the tax budgeted collections and actual collections for the period 2015 to 2018.

However, Fowler in his response explained that the recession experienced by the Nigerian economy in 2016 as well as lower oil prices affected the revenue collected by the FIRS.

See Fowler’s response: “I refer to your letter dated 8th August, 2019 on the above subject matter and hereby submit a comprehensive variance analysis between budgeted and actual collections for each main tax item for the period 2012-2018 as requested (see appendix 1).

“Your letter stated that actual collections for a 3-year period were significantly worse than what was collected between 2012 and 2014. Total actual collection for the said period wasN14,527.85 trillion, while total actual collection between 2016 to 2018 was N12,656.30 trillion.

The highlight of these collection figures was that during the period 2012 to 2014, out of the N14,527.85 trillion, oil revenue accounted for N8,321.64 trillion or 57.28% while non-oil accounted for N6,206.22 trillion or 42.72% and during the later period of 2016 to 2018, out of the N12,656.30 trillion, oil revenue accounted for N5,145.87 trillionor 40.65% and non-oil revenue accounted N7,510.42 trillion or 59.35%.

FIRS management has control of non-oil revenue collection figures while oil revenue collection figures are subject to more external forces.” He wrote: “The non-oil revenue collection grew by N1,304.20 trillion or 21% within the period 2016 to 2018.

“Kindly note that the total budget collection figure during 2012 to 2014 stood at N12,190.52 trillion compared to N16,771.78 trillion for the period 2016 to 2018, which represent an increase of 37.58%.

“Please note that the variance in the budgeted and actual revenue collection performance of the Service for the period 2016 to 2018 was main attributed to the following reasons:

“1. The low inflow of oil revenues for the period especially Petroleum Profit Tax (PPT) was due to fall in price of crude oil and reduction of crude oil production. Notwithstanding government efforts to diversify the economy, oil revenues remains (remain) an important component of total revenues accruable to the Federation. The price of crude oil fell from an average of $113.72, $110.98 and $100.40 per barrel in 2012, 2013 and 2014 to $ 52.65, $43.80 and $54.08 per barrel in 2015, 2016 and 2017. There was also a reduction in crude oil production from 2.31mbpd, 2.18mbpd and 2.20mbpd in 2012, 2013 and 2014 to 2.12mbpd, 1.81mbpd and 1.88mbpd in 2015, 2016 and 2017 respectively.

“2. The Nigerian economy also went into recession in the second quarter of 2016 which slowed down general economic activities. Tax revenue collection (CIT and VAT) being a function of economic activities were negatively affected but actual collection of the above two taxes were still higher in 2016 to 2018 than in 2012 to 2014. During the years 2012, 2013 and 2014, GDP grew by 4.3%, 5.4% and 6.3% while in 2015, 2016 and 2017 there was a decline in growth to 2.7%, -1.6% and 1.9% respectively. The tax revenue grew as the economy recovered in the second quarter of 2017.

“3. It is worthy of note that strategies and initiatives adopted in collection of VAT during the period 2015-2017 led to approximately 40% increase over 2012-2014 collections. In 2014 the VAT collected was N802billion, compared to N1.1 trillion in 2018. This increase is attributable to various initiatives such as ICT innovations, continuous taxpayer education, taxpayer enlightenment, etc embarked upon by the Service.

“4. Furthermore, it is pertinent to note that when this administration came on board in August 2015, the target the target for the two major non-oil taxes were increased by 52% for VAT and 45% for CIT. Notwithstanding the increase, FIRS has in line with the Federal government’s revenue base diversification strategy has grown the non-oil tax collection by over N1.304 trillion (21%) when the total non-oil tax collection for 2016-2018 is compared to that of 2012-2014.

“I am confident that our current strategies and initiatives will improve revenue collection and meet the expectations of government.

“Please accept the assurance of my highest regards.”

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Details of IBB’s meeting with lawmakers in Minna revealed

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Former Military President, Gen. Ibrahim Badamasi Babangida, on Thursday, told members of the Niger State House of Assembly, that they have met the expectations of the people.

IBB stated this when the lawmakers visited him at his Uphill home in Minna.

“I have been looking forward to meeting with you.

“I am proud to say that you have been doing well. You are meeting our expectations.

“We have heard of states lacking synergy among the arms of the government, but in Niger State that should not be your lot.

“Keep a good working relationship between the legislature, the executive and the judiciary. You have been doing this and I want you to keep it up.

“You are closer to the people. It is your responsibility to know what the people need and carry them along all the time. Do not leave them outside your projects and programmes,” he said.

Speaker Abdullahi Bawa Wuse explained that they visited the former President, to get the blessings required to run the legislature effectively.

“We are here to get the blessing of our father; this is because we know your concern and commitment to the development of this state and Nigeria.

“Outside office, you have done more than you did while in office. Your role as a father in the nation has ensured that Nigeria remains indivisible,” Bawa said.

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Tribunal upholds Ikpeazu’s election, dismisses Alex Otti’s petition

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The three-man panel of the Governorship Election Petition Tribunal sitting in Umuahia, the Abia State capital, and chaired by Justice A.L. Ogumoye, has dismissed the petition filed by 2019 APGA gubernatorial candidate, Dr. Alex Otti against the declaration of Gov. Okezie Ikpeazu.

The tribunal ruled that the petitioner failed to prove the case of over-voting, non-compliance to the INEC election guideline and electoral act.

Recall that Alex Otti had asked the tribunal to cancel fifteen out of the seventeen local government areas’ election results in Abia State.

Otti claimed that the respondents, PDP, and Governor Okezie Ikpeazu who was the governorship candidate of PDP perpetrated excessive malpractice in those LGAs in the last March 9, 2019, election conducted in the state.

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Importers Smuggling Rice In Tyres, Says Economist

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Due to the closure of Nigeria’s borders with Benin Republic, rice smugglers are seeking out more devious ways of importing the product into the country.

National Coordinator of the Institute of Chartered Economists of Nigeria, Dr Oladapo Ganiyu, while speaking with SaharaReporters said that people have resulted to fitting bags of rice into tyres of automobiles. 

Ganiyu, who claims this method is carcinogenic, said the border closure was untimely.

He said, “The closure of the border now is untimely. People are now packing rice inside tyres.

“When the four tyres are rolling, will you suspect there is rice there? The way they are bringing it in, it can cause cancer.

“The people I have spoken with on commercial buses and market women, say the rice is not sweet and it takes time to cook.”

Speaking further, Ganiyu said ICEN will give the government’s new economic team six months before judging their performance.

For over 30 days, Nigeria’s border with Benin Republic and parts of its Northern border with Niger Republic had been closed.

Comptroller-General of Customs, Hameed Ali, insists that the border closure will not cease until concerned West African states stop the smuggling of parboiled rice from their country into Nigeria. 

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