Business News

FIRS boss, Nami discloses why FIRS failed to meet revenue target under Fowler

The reasons the FIRS failed to attain its tax revenue projections under former Executive Chairman, Babatunde Fowler, have been disclosed by his successor.

Published

7 months ago

February 14, 2020

Fakoyejo Olalekan

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The reasons Federal Inland Revenue Service (FIRS) failed to attain its tax revenue projections under former Executive Chairman, Babatunde Fowler, has been disclosed.

On the factors that caused the shortfall during a senate interactive session with revenue-generating agencies, the present Executive Chairman, Muhammad Nami said, “Nigeria loses a lot of revenue through tax waivers granted to big companies which otherwise would have been taxed to buoy up government revenue.

“Also, illicit financial flow is a major cause of revenue loss to Nigeria. Coupled with this is the operational cost of the FIRS which is also high compared to the statutory provisions for the running of the organization.”

Nairametrics had reported that failure to meet tax projections for four years could have informed President Muhammadu Buhari’s decision not to retain Fowler for a second term.

What caused a shortfall in revenue? Non-discretionary tax waiver grants, illicit financial flows abroad and high overhead costs have been attributed as the factors that prevented the FIRS from achieving its revenue projections under Fowler, who led the tax administrator from 2015 to 2019.

Findings disclosed that Fowler failed to meet his collection target in 2015, 2016, 2017, 2018. For instance, in 2015, it set N4.7 trillion target but was only able to make N3.7 trillion in the actual collection. In 2016, 2017 and 2018, the target collections were N4.2 trillion, N4.8 trillion and N6.7 trillion but the actual collections were N3.3 trillion, N4 trillion and N5.3 trillion, respectively.

This led to the Federal Government issuing a query to Fowler although the shortfall had been on before Fowler’s appointment. The FIRS recorded a revenue shortfall of N4.88 trillion within a 10-year period, from 2010 to 2019.

Nairametrics had reported that under Fowler, findings of the National Audit Report disclosed the following:

545 companies had not remitted their Company Income Tax (CIT) to the FIRS valued at a total of N26 billion.
Companies, Federal and State MDAs, Local Government Councils and State Government within the Southwest Zone were yet to remit about N8 billion being their Value Added Tax.
Withholding tax from companies, government agencies and local government councils valued at about N5 billion were also yet to be remitted to the FIRS.
About 318 companies were said not to have remitted their Education, tax which is 2% on profits of Companies valued at N697 million.
Two companies are yet to remit N99 million, being their Capital Gain Tax of 10% from the disposal of these companies’ assets. All these unreconciled taxes were said to have been communicated to the FIRS chairman.
Out of 28,237 duly registered Companies, 11,221 failed to submit their annual returns to various tax offices. These contradict the provision of the Company Income Tax Act, which requires a company to render an account of its operations within six months of its accounting year-end.
This number of companies who failed to render its returns represents 39% of duly registered companies with the FIRS.

It was also revealed that, under Fowler, the tax agency failed to collect taxes worth about N41 billion in Lagos.

Fakoyejo Olalekan

Olalekan is a certified media practitioner from the Nigerian Institute of Journalism (NIJ). In the era of media convergence, Olalekan is a valuable asset, with ability to curate and broadcast news. His zeal to write was developed out of passion to shape people’s thought and opinion; serving as a guideline for their daily lives. Contact for tips: [email protected]

4 Comments

Anonymous

February 14, 2020 at 3:13 pm

You also failed to report that targets were raised to the highest levels under Fowler.

Reply
Akin

February 15, 2020 at 3:36 am

Has the profile changed under this new chairman? Bunkum!

Reply
Etinosko

February 15, 2020 at 9:52 pm

IF BUHARI could sack Fowler for not meeting his target, why hasn’t he sacked his service Chiefs? Or have they performed up to his expectations? I am sure Buhari had his reasons to sack Fowler aside this flimsy excuse. This new guy will know that getting ppl to pay is not as easy as he tut

Reply
El Komo

February 18, 2020 at 8:10 am

We are keenly watching that the new Chairman will surpass targets set for him.

Reply

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Financial Services

CBN grants Greenwich Trust Limited operational license for merchant banking

CBN has upscaled Greenwich Trust Limited to the status of a merchant bank.

Published

4 hours ago

September 19, 2020

Chidi Emenike

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The Central Bank of Nigeria (CBN) has upscaled Greenwich Trust Limited and granted it, operational license for merchant banking in the country.

According to an official statement released by the firm, the entity would be known as Greenwich Merchant Bank Limited. This license allows Greenwich Merchant Bank to upscale and offer such diverse services as corporate banking, investment banking, financial advisory services, securities dealing, treasury wealth and asset management, etc., making it possible to provide increased value to stakeholders beyond its previous scope.

Recall that the minimum capital requirements for establishing a merchant bank according to Merchant Banking Licensing Regulations in 2010 are N15 billion

With the addition of Greenwich Merchant Bank, Nigeria now has six merchant banks. The others are; FBN Quest, Coronation Merchant Bank, DSH Merchant Bank, Nova Merchant Bank and Rand Merchant Bank.

About Greenwich Trust Limited

Greenwich Trust Limited is an investment banking firm duly registered with relevant authorities such as the Nigerian Securities and Exchange Commission (SEC). It is a diversified firm with subsidiaries such as Asset management, GTL Properties, GTL Securities Limited, Cedar Express Limited and Meyer Plc.

Business News

Emirates Airlines banned from operating in Nigeria

UAE’s Emirate Airline has been banned from operating in Nigeria.

Published

4 hours ago

September 19, 2020

William Ukpe

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Emirates Airline has been added to the list of airlines which have been banned from operating in Nigeria. The ban will take effect from the 21^st of September.

This was announced by the Minister of Aviation, Hadi Sirika in a social media statement on Friday.

The PTF sub committee met today with EU Ambassadors to discuss Lufthansa, Air France/KLM ban. The meeting progressed well. Emirates Airlines’s situation was reviewed & they are consequently included in the list of those not approved, with effect from Monday the 21st Sept. 2020🇳🇬

— Hadi Sirika (@hadisirika) September 18, 2020

“The PTF subcommittee met today with EU Ambassadors to discuss Lufthansa, Air France/KLM ban. The meeting progressed well. Emirates Airlines’s situation was reviewed & they are consequently included in the list of those not approved, with effect from Monday the 21st Sept 2020.” Sirika stated.

This comes as the UAE government has been accused of not renewing visas of Nigerians in Dubai and also rumours of a VISA ban for Nigerians applying for visas.

Last month, the UAE embassy in Nigeria denied there is a VISA ban on Nigerians entering the Middle Eastern country. They said: “At the onset of the COVlD-19 pandemic, the UAE took a number of precautionary measures to combat the virus’ spread, including the temporary suspension on issuing UAE visas for all nationalities as of March 17, 2020.

After entering the recovery phase of the pandemic, the UAE eased some measures on July 7, permitting visitors from various countries to adhere to the necessary precautionary measures, including by showing negative PCR test results within 92 hours of travelling to the UAE. This includes those visiting from Nigeria.”

Energy

CBN introduces N250 billion stimulus package for gas investment to ease pain of fuel price increase

The CBN has introduced a stimulus package to help stimulate investment in gas as an alternative to fuel.

Published

5 hours ago

September 19, 2020

Chike Olisah

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As part of the palliative following the sharp increase in the price in the pump price of petrol, the Central Bank of Nigeria (CBN) has introduced a N250 billion stimulus package under a National Gas Expansion Programme that it hopes will help stimulate investment in the gas value chain and spur its use in transportation as an alternative to fuel-powered cars.

Large scale projects under this intervention programme will be financed under the Power and Airlines Intervention Fund (PAIF), in line with existing guidelines regulating the PAIF, while small scale operators and retail distributors will be financed by the NIRSAL Microfinance Bank (NMFB) and/or any other Participating Financial Institution (PFI) under the Agribusiness/Small and Medium Enterprises Investment Scheme (AgSMEIS).

This initiative is to be implemented in collaboration with the Federal Ministry of Petroleum Resources.

The objectives of the facility include;

Improved access to finance for private sector investments in the domestic gas value chain.
Stimulate investments in the development of infrastructure to optimize the domestic gas resources for economic development.
Fast track the adoption of Compressed Natural Gas (CNG) as the fuel of choice for transportation and power generation, as well as Liquefied Petroleum Gas (LPG) as the fuel of choice for domestic cooking, transportation, and captive power.
Fast track the development of gas-based industries particularly petrochemical (fertilizer, methanol, etc) to support large industries such as agriculture, textile, and related industries.
Provide leverage for additional private sector investments in the domestic gas market.
Boost employment across the country.

The activities that are eligible under the intervention shall include;

Establishment of gas processing plants and small scale petrochemical plants.
Establishment of gas cylinder manufacturing plants.
Establishment of L-CNG regasification modular systems
Establishment of autogas conversion kits or components manufacturing plants.
Establishment of CNG primary and secondary compression stations.
Establishment and manufacturing of LPG retail skid tanks and refilling equipment.
Development/enhancement of autogas transportation systems, conversion, and distribution infrastructure.
Enhancement of domestic cylinder production and distribution by cylinder manufacturing plants and LPG wholesale outlets.
Establishment/expansion of micro-distribution outlets and service centres for LPG sales, domestic cylinder injection, and exchange and
Any other mid to downstream gas value chain related activity recommended by the Ministry of Petroleum Resources.

The aggregators, manufacturers, processors, wholesale distributors, and related activities shall be funded under the Power and Airline Intervention Fund (PAIF), while the Small and Medium-scale Enterprises (SMEs) and retail distributors shall be funded by NIRSAL Microfinance Bank under AgSMEIS.

For the manufacturers, processors, wholesale distributors, etc, the term loan shall be determined based on the activity and shall not exceed N10 billion per obligor. The working capital shall be a maximum of N500 million per obligor.

While for the small and medium enterprises, the term loan shall be based on the activity and shall not exceed N50 million per obligor. The working capital shall be a maximum of N5 million per obligor.

Interest Rate

The interest rate under the intervention shall be at not more than 5% per annum (all-inclusive) up to February 28, 2021, thereafter, interest on the facility shall revert to 9% per annum (all-inclusive) with effect from March 1, 2021.

Loan Tenor and Moratorium

The manufacturers, processors, wholesale distributors, will have term loans which shall have a maximum tenor of 10 years (not exceeding December 31, 2030) with a maximum of a 2-year moratorium on principal repayment only. The working capital facility of 1 year with a maximum rollover of not more than twice, subject to prior approval.

The small and medium enterprises (SMEs) and retail distributors will have term loans that shall have a maximum tenor of 5 years (not exceeding December 31, 2030) with a maximum of 2 years on principal repayment only. The working capital facility of 1 year with a maximum rollover of not more than twice and subject to prior approval.

This new initiative involves getting many vehicles to run on gas by collaborating with investors to build the required infrastructure such as pipelines and petrol stations. It is also expected to help accelerate the use of natural gas and end gas flaring.