The House of Representatives’ Committee on Finance on Monday approved the 2020 budget proposal for Federal Inland Revenue Service (FIRS) with the projected revenue accruing to the Federation estimated at N6.06 trillion.
The FIRS Executive Chairman, Mr Mohammed Nami disclosed this during the 2020 budget presentation and 2019 budget defence to the House Committee on Finance, chaired by Hon. Abiodun Faleke who assured that the budget proposal would be paid and possibly passed on the floor of the House on Tuesday.
On the stamp duty, he disclosed that the sum of N446 billion was projected in 2020 against the sum of N18.19 billion realised in 2019, adding that the Service had earlier proposed the sum of N70 billion for 2020.
In the bid to realize the N446 bill in revenue target approved in the MTEF and 2020 Appropriation Act passed by the National Assembly and assented to by Mr President, the FIRS Chairman unveiled plans to introduce flagship tax of 1% on total contract sum being awarded across the country henceforth which is to be paid by Service Provider/Contractor while the statutory Value Added Tax (VAT) of 7.5% is to be borne by Consumers.
Breakdown of the projected revenue includes N1.56 trillion from oil revenue and N4.5 trillion from non-oil revenue for the year 2020.
As encapsulated in the FIRS (Establishment) Act, out of the 4% total cost of collection worth N180 billion for this year, the Service is to retain N168 billion while N11.2 billion as 2% cost of collection for Customs for revenue to be collected on behalf of FIRS.
He added that the revenue projection for 2020 was predicated on assumptions approved in the 2020-2022 Medium Term Expenditure Framework (MTEF) and Fiscal Policy Paper (FSP) including 1.8mbpd crude production against 2.3mbpd in 2019; $28 per barrel crude oil revenue; 7.5% Value Added Tax (VAT); N360/$ exchange rate as well as 10,700 staff.
While giving details of the Service’s stewardship for 2019 fiscal year, the FIRS Chairman, said: “as against the total revenue projection of N8.97 trillion in 2019 fiscal year, the Service realized the total sum of N5.026 trillion representing 58.64% of the total revenue.
Breakdown of the revenue showed that the sum of N2.9 trillion against the actual of N3.18 trillion was realized from non-oil while the balance was realised from the Petroleum Profit Tax (PPT).
He added that the Service incurred expenditure worth N113 billion actual expenditure against as N146.5 billion projected in 2019.
The Service also realised the total sum of N116.29 billion as 4% cost of collection and ceded total sum of N10 billion to Nigeria Customs Service (NCS) being 2% cost of collection for the revenue collected on behalf of FIRS in the year under review.
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