THE contents of the recently approved 2019 budget of N8.9 trillion are giving Nigerians concern, especially with the Federal Government’s approval of a N30,000 new minimum wage. However, some indicators in the economy are giving cause for cheer. Last week, the Federal Inland Revenue Service (FIRS) posted the sum of N1.5 trillion as revenue during the first quarter (Q1) of 2019. According to its chairman, Mr. Babatunde Fowler, the sum included revenue from non-oil taxes which were 11 per cent higher than the amount which accrued to the agency from what the sector obtained in Q1 of 2018. During the same period in 2018, FIRS posted the sum of N1.17 trillion, N330 billion less than the amount declared this year and 18.7 per cent of the agency’s target of N8.9 trillion for this year. While this projection by the FIRS seems ambitious, the agency has said that it is achievable with the cooperation of taxpayers and the deployment of technology.
Given the country’s economic challenges, it is very obvious that government would require far more fiscal ingenuity than it has been deploying in the last four years. The FIRS intervention has the potentiality to deepen the tax net and thus offset some of the financial challenges. It also shows that the earlier promise to erect an integrated national database is achievable. Over the years, managing data has been a major challenge in the country. In this connection, the reported attainment of the threshold of 45 million people in the tax net could only have come to fruition through a calculated interface between agencies like the Corporate Affairs Commission (CAC), Nigeria Inter-Bank Settlement System (NIBSS), Nigeria Identity Management Commission (NIMC), Federal Road Safety Corps (FRSC), among others. Such synergy must become routine.
Earlier, the Tax Identification Number (TIN) exercise which the FIRS initiated, coming on the heels of schemes like the Voluntary Assets and Income Declaration System (VAIDS), had reportedly resulted in a quantum leap of national revenue from N3.3 trillion in 2016 to N4 trillion in 2017 and N5.3 trillion in 2018. There was some kind of economic amnesty given to taxable concerns with the aim of ensuring that more taxpayers entered the tax net, especially with the aim of getting these concerns to identify with the process by regularising the titles of their assets. When it was first implemented in the first year, FIRS reportedly brought into the national coffers more than N17 billion. But the agency should not rest on its oars in the course of ensuring a significant rise in national tax revenue. There must be a conscious effort to enumerate more taxpayers with the deployment of the TIN initiative, as a corollary to the string of reforms which the agency has embarked upon. It must also plug leakages. This is a recipe for stopping the haemorrhage of a huge chunk of tax revenues from the national purse.
Since the country rose from the after-effects of recession, it has been in need of plausible innovations. There is no doubting the fact that pro-poor advocates who canvassed for a far more humane and socially minded regime of tax administration would be pleased with the idea of widening the tax net to ensure that the fat cows of the economy pay up their taxes. This is important in order to ensure that the option of raising taxes which will obviously affect the poor can cease from being an option. As we noted in our previous editorials, in saner climes, tax evasion attracts long jail terms for individuals while it is unimaginable at the corporate level. We observed that before crude oil became the prince of revenue generation in the country, tax payment by all adult citizens was compulsory and defaulters themselves knew they were felons, hence their fugitive existence.
As we noted, the question of the ease of doing business and attra cting local or foreign investments is a different issue that should be addressed more comprehensively. The foregoing notwithstanding, complaints about the orgy of arbitrariness, duplication and inconvenience that have bedevilled tax administration in the country must be addressed decisively. With oil prices still subject to global volatility, the overall goal should be to rescue the country’s economy from dependence on oil so that it cam gain a better foothold in the quest to mobilise funds for developmental growth.
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