A day after the revenue target for the fiscal year was unveiled, the Minister of Finance, Mrs. Kemi Adeosun, Wednesday handed down the marching orders to the Federal Inland Revenue Service (FIRS) to deliver on the N4.957 trillion tax target for 2016 and said failure was not an option.
Adeosun’s riot act to the nation’s revenue collector came as the Debt Management Office (DMO) said Nigeria’s total public debt stock increased to $65.428 billion (N12.60 trillion) as at December 2015, from N11.2 trillion in 2014, indicating the need for the federal government to raise more revenue to offset its financial obligations.
The 2016 revenue target was unfolded Tuesday in Abuja at the 2016 Annual Corporate Strategy retreat of the FIRS with the theme “Optimising Non-Oil Tax Revenue Collection Through Compliance and Enforcement.”
In issuing the directive to the FIRS, Adeosun underscored the importance of the agency’s attainment of its 2016 target to the federal government’s policy direction.
She spoke at the second day of the retreat saying: “There is really no room for failure. Really, there is no room for failure. Please ensure you deliver. The nation will depend on FIRS to fund the budget. We need the money to stabilise the economy.
“In addition to your professional pride, and the satisfaction you may derive from working for FIRS as a professional, please note that you are also building the nation by realising the target and by being professional, honest and dedicated in the way you do your work. This is what the nation needs now.
“This is not a joke. We need everybody to do his/her beat to ensure that everybody contributes to the achievement of the target. I look forward to the excellent ideas that will improve revenue generation as you proceed in this retreat.”
According to a statement issued by FIRS’ Head, Communications & Servicom Department, Wahab Gbadamosi, the minister acknowledged the strides the agency had made in the past and the successes it attained since its new Chairman Tunde Fowler resumed. “I know your chairman as an achiever. He did very well in Lagos. Work with him. He will do well here. He is one person who has the welfare of staff on his mind,” she said.
When the retreat opened on Tuesday, FIRS Executive Chairman, Fowler, announced FIRS’ 2016 target of N4.957 trillion. He said the tax agency hopes to earn N3.87 trillion from Value Added Tax (VAT) and Companies Income Tax (CIT) this year.
The N3.87 trillion from VAT and CIT will be 78.42 per cent of the N4.957 trillion tax revenue targeted for 2016.
According to him, “The above target is clearly unacceptable and not a reflection of our capacity. I am particularly not pleased with the very poor VAT collection, which based on my previous experience at the state level in the administration of a tax similar to VAT, should be a high yield and easy to collect tax.
“Even the relatively good performance for CIT is buoyed by the fact that an initiative directly overseen by my office in the last three months of 2015 accounted for a collection of over N122 billion, without which the performance for CIT would have been less than 85 per cent.”
FIRS, he noted, is collaborating with state governments, tax consultants, major audit firms, stakeholders in the federal system, including the National Assembly.
He said the tax agency was undertaking a nationwide VAT and Withholding Tax monitoring exercise and nationwide taxpayer registration exercise anchored by the FIRS Federal Engagement and Enlightenment Tax Teams, (FEETT).
Also at the retreat, the Minister of Budget and National Planning, Senator Udo Udoma; his Federal Capital Territory (FCT) counterpart, Alhaji Muhammed Bello; the Accountant-General of the Federation, Alhaji Ahmed Idris; Chairman, Senate Committee on Finance, Senator John Owan Enoh; and the Deputy Chairman, House of Representatives Committee on Finance, Hon. Austin Chukwurah emphasised the critical role FIRS would play in providing revenue towards realising federal government’s plan for 2016.
Representatives of key accounting and tax audit firms: KPMG, Ernest Young, Akintola Williams and Delloite, PEDABO, FITC Consulting, and PriceWaterHouse Cooper suggested how FIRS could be innovative, increase tax yield, expand tax base and encourage taxpayers to pay their taxes happily.
As the tax collectors rounded off their retreat, news came from the DMO that Nigeria’s total public debt stock had increased to $65.428 billion (N12.60 trillion) as at December 2015, from N11.2 trillion in 2014.
The total external debt component was valued at $10.71 billion (N2.11 trillion), while the domestic debt stock (for federal government alone) was put at $44.85 billion (N8.83 trillion).
The domestic debt profile for states was further valued at $9.85 billion (N1.65 trillion) as at December 2014.
The DMO, in a statement posted on its website yesterday, also noted that the total external debt portfolio stood at $55.57 billion (N10.94 trillion).
Despite the criticism over the country’s rising debt profile, the DMO had maintained that it was still within the approved borrowing threshold.
The federal government is currently seeking to further borrow $1 billion from the African Development Bank (AfDB) to help fund the 2016 budget deficit of about N3 trillion as oil prices volatility continues to hamper revenue prospects.
But former President Olusegun Obasanjo recently raised concerns over the country’s rising debt profile.
According to the DMO, multilateral instruments accounted for $7.56 billion of states and federal government external debt profile, while credit from China Exim Bank, India, Eurobond among other accounted for over $3 billon.
The federal government domestic debt stock (bonds) accounted for N5.8 trillion or 65.73 per cent of total domestic instruments, while the Nigerian treasury bills accounted for N2.77 trillion or 31.38 per cent. Treasury bonds represented N255.98 billion or 2.90 per cent.