The Federal Inland Revenue Service (FIRS) has recorded a new tax height after the agency recorded over N10 trillion in tax revenue in 2022 which is the highest tax collection it has ever recorded.
With the achievement, the agency recorded 96.7 percent of its N10.44 trillion total revenue set target by the Federal Government for 2022.
A breakdown of the taxes showed that the agency received N10.1 trillion from both oil (N4.09 trillion) and non-oil (N5.96 trillion) revenues as against a target of N10.44 trillion indicated in the 2022 budget.
According to the agency, Companies Income Tax contributed N2.83 trillion, Value Added Tax contributed N2.51 trillion; Electronic Money Transfer Levy contributed N125.67 billion and Earmarked Taxes contributed N353.69 billion,” it stated.
FIRS revealed this on Monday in its publicly available FIRS 2022 Performance update report signed by its Executive Chairman, Muhammad Nami, who described the achievement as a commendable record.
The report noted that the Non-oil taxes contributed 59 percent of the total collection while remittances from the oil taxes stood at 41 percent of the total collection, adding that the N10.1 trillion achieved is exclusive of taxes waived on account of various tax incentives granted under the respective laws, which amounted to N1.805 trillion.
The FIRS received N146.27 billion which is the total value of certificates issued by the Service to private investors and NNPC for road infrastructure under the Road Infrastructure Development Refurbishment Investment Tax Credit Scheme created by Executive Order No. 007 of 2019.
In 2021, the Service achieved a record tax collection of N6.405 trillion, over a hundred percent of its collection target for the year, as well as the first time that the Service will cross the six trillion mark.
Speaking on the record financial performance, the FIRS noted in the report that the Nami-led management upon assumption of office came up with a four-point focus, which were administrative and operational restructuring; making the service customer-focused; creating a data-centric institution; and automation of administrative and operational processes.
It further noted that over the period of 2020 to 2022, the management had introduced reforms bordering around this four-point focus which were producing results, adding that it also operationalised its data mining and analysis system thereby allowing for data-backed taxpayer profiling.
“The Service had also automated most of the administrative and operational processes, a major leap was the full deployment of the TaxPro Max for end-to-end administration of taxes in June 2021; the module for the automated TCC went live 1st January 2023 while taxpayers had already downloaded over 1,000 TCCs this year without having to visit FIRS office,” the report read.
Other reforms the Service introduced in this period focused on the detoxification of the tax environment by ridding it of mutual mistrust, negative tax morale, and tax evasion, through effective taxpayer education, open engagement with stakeholders, and improved services.
“This collection was possible through collaboration with our stakeholders, from our colleagues at the Executive branch of government, to the members of the judiciary, to our brothers and sisters at the National Assembly, as well as the tax advisory committee, professional bodies, unions, and most crucially our taxpayers,” Nami said.
Speaking on the outlook for 2023, the chairman said that the Service would build on the current reforms, achieve full automation and continue to establish a resilient Service that would continue to provide sustainable tax revenue to fund the government.
“Our goal is to identify more areas where we can improve on in the delivery and efficiency of our collection; and plug loopholes, while deploying innovative reforms in data and artificial intelligence; Ultimately, we believe that the FIRS can shoulder the responsibility of providing revenue needed for the governments across the Federation to cater for the needs of the Nigerian people through taxes,” he said.
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