Nigeria heading for fiscal crisis – Presidency

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The Presidency has warned that the country might be heading for a fiscal crisis if urgent steps are not taken to halt the negative trends in target setting and target realisation in tax revenue.

This is even as it said that under Muhammadu Buhari’s administration, the number of taxable adults has increased from 10 million to 20 million with concerted efforts still on-going to bring a lot more into the tax net.

The Senior Special Assistant to the President on Media and Publicity, Garba Shehu, said this in a statement denying media reports that the Chairman of the Federal Inland Revenue Service, Babatunde Fowler, is not under any investigation.

In a letter dated August 8 and signed by the Chief of Staff to the President, Abba Kyari, has asked Fowler to explain the variations in budgeted collections and the actual collections reported by the agency for the period in question.

Fowler’s query was conveyed under the heading, “Re: Budgeted FIRS Collections and Actual Collections”, with reference number SH/COS/08/5/A/301.

The letter was a response to an initial report on tax collections the FIRS’ boss forwarded to the President earlier on July 26. It had reference number, FIRS/EC/CWP/0249/027.

The Presidency directed Fowler to give reasons for variances by providing a “comprehensive” “variance analysis” for each tax item from 2015 to 2018.

The letter raised particular concerns over the collections for 2015 to 2017, describing them as “worse than what was collected between 2012 and 2014.”

The FIRS boss was further instructed to respond to the query latest by January 19.

Shehu on Monday said: “The letter from the Chief of Staff to the President, Abba Kyari, on which the purported rumour of an investigation is based, merely raises concerns over the negative run of the tax revenue collection in recent times.

“Taking a cue from today’s (Monday) presentation of Vice President Yemi Osinbajo at the Presidential Retreat for Ministers-Designate, Federal Permanent Secretaries and Top Government Functionaries, which dwelt on an  ‘Overview of the Policies, Programmes and Project Audit Committee,’ a body he chaired,  projected revenue of government  falls behind recurrent expenditure even without having factored in capital expenditure.

“Consequently, it would appear that the country might be heading for a fiscal crisis if urgent steps are not taken to halt the negative trends in target setting and target realisation in tax revenue.

“Anyone conversant with Federal Executive Council deliberations would have observed that issues bordering on revenue form the number one concern of what Nigeria faces today, and therefore, often take a prime place in discussions of the body.

“It is noteworthy and highly commendable that under this administration, the number of taxable adults has increased from 10 million to 20 million with concerted efforts still on-going to bring a lot more into the tax net.”

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