FG Committed To 77 Percent Increase In Domestic Revenue, As FIRS Targets N19.41tn


The Federal Inland Revenue Service (FIRS) has a collection target of about N19.41 trillion for the year after it surpassed its 2023 target by N816 billion, having collected about N12.37 trillion, Executive Chairman of FIRS, Dr. Zacch Adedeji, has disclosed

He disclosed this on Wednesday in Abuja at the opening of the FIRS 2024 Strategic Management Retreat, with the theme, “Reimagining Tax Administration for Equity and Economic Growth.”

Confirming what the FIRS boss said, Dr. Oluwatoyin Madein, the Accountant-General of the Federation (AGF), said  that FIRS now accounted for about 70 per cent of the country’s total revenues, but added that a lot of tax revenues are still left uncollected and there is need to expand the current tax base.

Also, speaking, the Minister of Finance and Coordinating Minister of the Economy, Wale Edun, said the country must focus on domestic revenue mobilisation to fund its budget. Edun said amid the current economic realities, exploring expensive debts was not good for the country.

According to him, President Bola Tinubu administration remained committed to actualising a 77 percent increase in domestic revenue mobilisation to assist in funding critical infrastructure, especially healthcare and education.

 The Minister said while tax revenue remained crucial, the issues around increase in government revenue deserved attention, adding that federal government-owned enterprises must do more to augment the current fiscal position of the government going forward.

While commending the FIRS chairman and his team for exploring options to boost collection, Edun stated that the country’s tax revenue, as a percentage of GDP, remained low at 10 per cent, compared to other African countries and the developed world, in general.

He said though FIRS met and surpassed its target for last year, additional efforts were still needed to measure up to the challenge this year.

He challenged the FIRS management on public trust and accountability to the people regarding tax collection.

Edun, “Bear in mind that to maintain and build confidence and public trust, what the taxpayers want to see is that their money is faithfully collected as it should be and properly spent and accounted for with minimal excess wastes and leakage. They deserve it and I believe you’ll give it to them.”

He said the emphasis of the current administration was to grow the economy, adding, “Given what is going on around the world, even a high and elevated and sustained increase in interest rates, borrowing is not the way to go.

“The emphasis is on IGR, domestic resource mobilisation, and equity as opposed to debt.”

Adedeji expressed confidence that the task was not impossible, especially given the reforms and new structure being put in place under his leadership to boost voluntary compliance by taxpayers.

He said the new approach was to provide the enabling environment for businesses to survive in order to facilitate collection of taxes.

Adedeji told THISDAY, “We must provide an effective tax collection system, we are not a revenue generating agency; we are a revenue collection agency.

“And if you go with the plan the president has to rejuvenate the economy, it comes mainly from macroeconomic indices, remember, we are going to tax prosperity not poverty, we are going to focus on the fruit and not the seed.

“Our duty is to make sure we have that viable economic environment to lead to economic prosperity and for us here, it’s just to put the structure in place to aid effective collection.”

The FIRS boss said, “Our focus is to increase tax without increasing tax rate. So, our focus is actually to improve our effectiveness in collection to drive voluntary compliance.

“Also, expand the base and have a good environment that makes the companies prosper. When the base is big, the same percentage will give you more taxes and that is our target.”

He said the unveiling of the new FIRS organisational structure, was a critical milestone in the service’s commitment to revolutionise tax administration in the country.

Adedeji said the cornerstone of the paradigm shift was establishing a customer-centric organisational structure designed to streamline processes and enhance efficiency in our tax operations.

“We are not merely adapting to change; we are leading it. The forthcoming structure, set to kick off from February 2024, embodies our dedication to modernise and digitise the tax administration landscape in Nigeria.”

He stated that in its pursuit of a more efficient and contemporary tax administration methodology, the service was embracing an integrated tax approach, leveraging technology at every step.

This approach, he said, positioned FIRS at the forefront of innovation, ensuring that it meets the evolving needs of our taxpayers in a rapidly changing world.

Adedeji said, “The structure advocates for a comprehensive approach to taxpayer services, consolidating our core functions and support under one umbrella. By tailoring our services to specific taxpayer segments, we aim to simplify the taxpayer experience. No more complexities, no more overlaps—just a seamless and user-friendly interaction for every taxpayer.

“In a ground-breaking move, we are shifting away from traditional tax categorisation. Instead of maintaining different departments for distinct tax categories, the new structure formulates taxpayer segments based on thresholds. This tailored approach ensures that taxpayers are guided and serviced according to their specific needs, eliminating confusion and redundancy in tax administration.

“Behind this transformative initiative are carefully considered considerations detailed in our operations plan. We highlight the rationale behind our integrated approach, the benefits of comprehensive taxpayer services, and the logic behind tailored taxpayer categories, which will be presented to management in the subsequent sessions of this workshop.

“These considerations set the stage for a more responsive, efficient, and user-friendly tax administration system.”

Adedeji explained, “Let me assure you that due process will be followed in this reformation.

“Extensive re-orientation and change initiatives will be implemented to ensure that no one is left behind. We recognize the need for meticulous planning, effective communication, and unwavering commitment to navigate this transformative journey successfully.”

According to him, “FIRS is already a formidable force, and with these new efficiencies, we can indeed meet and exceed our targets. This is not just a restructuring; it is a catalyst for a monumental leap forward, a collective investment in our shared future, and an unyielding commitment to excellence in tax administration.”

He explained that the proposed structure is not just a set of reforms but a commitment to redefine FIRS’s role in shaping a modern, efficient, and customer-focused tax administration system.

Adedeji, “Through innovative organisational restructuring and process optimisation, FIRS is committed to fostering a taxpayer-friendly environment that aligns with global best practices and positions Nigeria as a leader in contemporary tax administration.

“As we unveil this new chapter in the history of FIRS, I urge all of you to embrace change, to be pioneers in this transformative journey, and to envision the future we are collectively building. Together, we will redefine excellence in tax administration, setting new standards and inspiring others to follow.”

Meanwhile, Attorney General of the Federation (AGF), Lateef Fagbemi, SAN, said the federal government will provide all the support required by FIRS to enable it to deliver on its mandate.

Fagbemi said an effective tax administrative system wa critical for growth and development, noting that adequate taxes must be collected to fund government infrastructure and social programmes while also supporting the operating environment.

He said it was important that tax laws and administrative processes were all-inclusive as well as stakeholder centric and not just tax payers centric.

He advised, “However, the story is changing. We have seen a massive improvement in tax collection with the changes in FIRS over the years.

“The FIRS now contributes about 70 per cent of the nation’s total revenues. Yet, a lot of tax revenues are left uncollected.”

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