The Executive Chairman of Federal Inland Revenue Service (FIRS), Muhammed Nami, said his agency might not meet the N8.5 trillion revenue target set by his principal, President Muhammadu Buhari.
Nami said that for such ‘unusual’ target to be visible, it would need the Lagos Inland Revenue Service (LIRS) to share certain information.
According to the FIRS boss, the target set by President Buhari for revenue mobilisation is unusual and a huge task, which needs to be confronted with a partnership between LIRS and FIRS.
He requested that the Lagos State Government share information with the service to make generating the N8.5 trillion target possible. Lagos State generated the biggest Internally Generated Revenue of N205.16 billion in half-year 2019 and this constituted 30% of the IGR generated across states.
During a visit to Governor Babajide Sanwo-Olu, the FIRS boss said without the assistance of Lagos State, FIRS might be unable to meet its target.
“We want to request that the internal revenue in Lagos state share certain information with us so that we can collaborate in not only generating income for the country but also building capacity for the staff of FIRS and IRS, we feel without this collaboration we hardly can generate N8.5trillion that we have been instructed to collect by the president.”
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Companies are evading tax: Nami also disclosed that multinational companies were evading tax payment. According to him, 2011 was the last time some firms declared their profit and debt taxes. He said the companies would conduct business in Nigeria and leave afterwards.
“The last time some of the multinational companies in Nigeria declared their profit and debt taxes goes as far back as 2011. We are of the view that with you being their host, we should be able to map out a strategy on how to tackle these issues.
“These are companies that most of their products are consumed daily in our houses, they will come here, do business, go back to their country and leave us with the huge responsibility of providing security for their businesses and other infrastructure to enhance an atmosphere to operate optimally.”
He added that “We are all aware that the president has given us an unusual target of N8.5trillion to collect to fund the budget, we feel this is a huge task in view of the fact that the tax average to GDP in Africa is as huge as 17%.
“In Nigeria which is the first economy, we have just 6 per cent tax ratio to GDP. It becomes a challenge also that the second-largest economy in Africa has a tax ratio to GDP in the region of 27 to 28 per cent. This becomes an issue because most of the companies that get tax spectrum are all based in Nigeria.”
What will happen if Nami fails to meet the target? With Nami already uncertain about the possibility of meeting the target, he might end up like his predecessor, Babatunde Fowler, who couldn’t retain a second term after failing to meet the target set by President Buhari. Fowler had received a query as a result of his inability to meet the target. Fowler was FIRS boss from 2015 to 2019.