…Service to generate N7.61trn from revenue collection
The Senate has approved the sum of N216,646, 579,231 billion naira as expenditure for the Federal Inland Revenue Service (FIRS) for the 2021 fiscal year.
This was just as the upper chamber gave its approval for the service to review upward, its revenue target from N5.076 trillion proposed for the year 2020 to N7.61 trillion naira in 2021.
The approval came on Wednesday, following the consideration of a report by the Senate Committee on Finance.
Chairman of the Committee, Senator Solomon Olamilekan Adeola (APC, Lagos West), in his presentation, said the Federal Inland Revenue Service proposed a total revenue collection of N7.61 trillion for 2021 as against N5.076 trillion budgeted in 2020, a figure which represents about 49.90 percent increase above the corresponding year’s budget.
According to the lawmaker, out of the proposed total collection of N7.61 trillion, N5.645 trillion is expected from Non-Oil components, while N1.964 trillion is expected from Oil components.
He added that, the cost of collection from 4 percent net of 2 percent NCS Value Added Tax (VAT) was projected at N216.65 billion to fund Personnel, Overhead and Capital costs in 2021, as against the sum of N180.76 billion budgeted for in 2020.
Out of the proposed expenditure of N216.65 billion for the 2021 fiscal year, Adeola said the sum of N107.52 billion is for Personnel Cost; N47.22 billion for Overhead Cost; and N61.9 billion for Capital Cost, as against N97.36 billion, N43.64 billion and N27.80 billion budgeted for the three expenditure heads in 2020, respectively.
Olamilekan noted that the Cost of Collection to the Service was pegged at four (4) percent of Non-Oil revenue.
He, however, disclosed that, “there will be marginal reduction in the taxable income of tax payers due to the effect of COVID-19 pandemic.”
“The Service seeks to continuously improve its technology for automated tax collection across all sectors of the economy through e-filing, e-registration, e-payment etc to facilitate ease of doing business with tax payers,” Adeola added.
He emphasized that there would be no recruitment into the Federal Inland Revenue Service in the year 2021.
The lawmaker who underscored the need to intensify tax payers education and engagement with a view to improving compliance with tax laws, noted that the exemption of some categories of tax payers from payment of tax as enshrined in the 2019 and 2020 Finance Act would impact on revenue collection.