The Chairman of the Federal Inland Revenue Service (FIRS), Muhammad Nami, has projected that about N4 trillion would be generated from the Nigeria’s extractive sector in 2020.
This is coming months after he said the FIRS might not meet President Muhammadu Buhari’s tax revenue target.
Nami said for the FIRS to be efficient in its tax collection in the industry, tax evasion by oil majors and multinationals operating in Nigeria must be prevented. He made this known during a meeting with the Nigerian Office of the Organisation for Economic Cooperation and Development (OECD).
He revealed that the illegal act of transfer pricing, which aids foreign companies in dodging tax in Nigeria and transfer their profit offshore, must be dealt with. He called for the support of OECD to curb the practice.
According to Nami, in order to meet tax revenue targets, there must be collaboration between the FIRS and the oil and gas sector as well as the digital businesses, which have become difficult to tax due to their position and base of operation.
“ICT has also made tax collection more complex, especially in trans-border trade and trans-continental commerce in which big players like Amazon, Google, Facebook, Alibaba and other e-commerce corporations do big business around, drive the digital economy and yet countries find it difficult to take due tax from the huge economic activities these online giants engage in.
“This is more, so for developing countries like Nigeria where our people buy luxury goods more and more online while these big online stores don’t pay any tax to us here in Nigeria,” Nami said in a report by DailyTrust.
Nairametrics had previously reported that Nami described President Buhari’s tax revenue target of N8.5 trillion as unusual and that the FIRS might not be able to achieve it. At the time, Nami said he needed the support of the Lagos State Government to make the target achievable.
What happens if Nami fails to meet 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 his position 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. He was FIRS boss from 2015 to 2019.