The Federal Inland Revenue Service surpassed its 2023 revenue target by N816bn, a 107 per cent performance over the set goal and has set a target to collect N19.4 turn in tax this year.
The Coordinating Director of Special Tax Operations Group, Amina Ado, disclosed this at the 2024 management retreat on Wednesday.
The Federal Government expects N19.41trn revenue from the FIRS in 2024.
This target represents a significant increase of 56.9 per cent from the previous year’s actual revenue and 67.91 per cent from the previous year’s target.
FIRS had a target of N11.56trn however, it realised N12.37trn, an N816bn higher in 2023.
While stating the strategy the agency will deploy to achieve the N19.4trn revenue, Ado noted that the agency engaged with other regulators in 2023 to achieve its success and will continue to engage them, other tax practitioners and intermediaries this year.
“We engaged with other regulators in 2023 and we will continue to engage them, tax practitioners, intermediaries and the withholding concept to expand the tax base as much as possible under the law.
“The law has given us a lot of opportunities to expand the withholding concept so that we can take the taxes and that way, the leakages downstream can be lowered. These are strategies we will deploy to ensure we deliver on this ambitious target”, she said.
She added that the FIRS will ensure its service delivery to taxpayers is improved while it will reorganise ligation and prosecution to make sure those who are not compliant will be brought to book.
“We will improve the management of large taxpayers and these sector contributors because they provide a lot of revenue we are seeing. We will improve service delivery and leverage technology to make sure we make it easy for taxpayers to pay.
“For those who are not compliant, we will make it very difficult for them to do so. We will reorganise our litigation and prosecution and enforce our debt collection processes to ensure the defaulters are brought to book,” she said.
The FIRS also recorded a 21.7 per cent increase in its 2022 revenue of N10.18trn. The trend of increase in projected revenue has been maintained between 2019 and 2023 where it recorded N5.262 trn, N4.952 trn, N6.403 trn, N10.179 trn, and N12.374 trn, respectively.
According to the Coordinator, Company Income tax topped the list as the most collected tax for the year as it makes up 36.14 per cent of the total taxes collected in 2023, It is followed by Value Added Tax of N3.64 trn and Petroleum Profit Tax of N3.17 trn.
The data shows that the Federal Government expects more taxes from the oil sector, about N9.96trn this year. This is about 214.2 per cent of what was generated from this form of tax last year.
Ado noted that the sustained growth in revenue collection is largely attributed to FIRS’s administrative reforms, such as the automation of tax collection processes, the introduction of TaxPro-Max, and the use of third-party data for enhanced tax intelligence.
Policy reforms have also played a significant role, including the increase in VAT and Education Tax rates and improvements in tax laws through Finance Acts.
“Despite these achievements, FIRS acknowledges the challenges ahead, particularly in the face of global economic uncertainties, fluctuating oil prices, and internal resistance to change. However, the agency remains resolute in its commitment to national duty, aiming to silence doubts and confidently declare its capability to meet and exceed its targets,” she assured.
Speaking at the retreat, the Executive Chairman, Zacch Adedeji, said the target is achievable with the series of reforms being implemented by the Service.
He said, “Our focus is to drive for long-term compliance. And in a few minutes now, by those rules, we have the new structure that we have. And what we’ve done in general is to move from the functional type of tax unit to customer-centred.
“And we want to use that to drive compliance because the focus cannot be on investigation. The real strategy is to drive compliance and the way to do it is that there will always be consequences for noncompliance.
“So, The focus should not be let’s go and tax informal. The focus should be to move the informal sector to the formal sector, improve their skill and then we can tax them.”
END.