*Tax contribution to GDP on the ascent’

The Federal Inland Revenue Service (FIRS) has netted non-oil tax revenue of N406.80 billion during the first quarter (January-April), it was learnt at the weekend.

The agency realized a total of N1.248 trillion during the quarter.

This was disclosed at the opening of the Service Regional Enlarged Management Meeting, (REMM) and Town Hall Meeting of the North Central Region, FIRS/FCT (Federal Capital Territory) and the Large Tax Office, LTO Abuja held in Makurdi, the Benue state capital.

The figure shows a collection of N841.61 billion of oil tax revenue and N406.80 billion of non-oil tax revenue collected between January and April.

Although, the Service had exceeded the N1.164 trillion target set for the period, Coordinating Director, Tax Operations Group, Samuel Ogungbesan who spoke at the opening segment of the REMM, the Service noted it could improve on non-oil revenue sources.

At a presentation during a recent retreat by the Revenue Mobilisation Allocation and Fiscal Commission, RMAFC, the FIRS Executive Chairman, Ifueko Omoigui Okauru, noted that despite the nation’s dependent on oil as its major revenue earner, the contribution of tax to federal revenue is on the ascent.

She explained that from a total tax receipt of N1,194.80 trillion in 2004 of the nation’s total collection of N3.978 trillion , tax component of collection shot up to 2.197.60 trillion in 2009. This is from total federal revenue of N4.845 trillion during the same year.

The FIRS Chairman, noted that the percentage of oil taxes in relation to total tax collection is  on the ascent.  In 2005, taxes from oil  was an all high of 77.6 per cent of all taxes collected.

FIRS  brought this down to 42.7 per cent in 2009.  Last year (2010),  non-oil component of collected taxes was 47.86 per cent.

Given further details on FIRS contribution to federal revenue, the FIRS Chairman explained that  FIRS contributed N1.741.80 of  the N5,619.30 federal revenue in 2005. In 2006, total tax revenue was N1,866.20 (30.79%)  of the total  federal earning of N6,061 trillion. In 2007, while the total federal revenue was N5,715.50 trillion, the contribution of tax total revenue was  N1,846.90 trillion. In 2008, tax accounted for N2,972.20 trillion of the federal  earning of N7,866 trillion. Two years ago, ( 2009) tax receipts accounted   for N2,197.60 of collective federal earning of N4,845. Trillion.

The FIRS Chairman, clarified on the petroleum/oil component of its receipt. Omoigui Okauru: “Another clarification, which is necessary in this regard relates to the revenue items collected and accounted for by the FIRS. In this regard, the FIRS has received recent enquiries as to what items are comprised in its tax collection profile with specific reference to petroleum profits tax.

Let me therefore clarify that petroleum profits tax as collected by the FIRS includes only taxes collected on profits of companies involved in petroleum operations and does not include royalty or crude sales of the Federal Government, which is handled by either the NNPC or the DPR (although the FIRS is the Government agency vested with oversight on all the above revenue items).  Accordingly the amounts petroleum profits tax collected by the FIRS over the years as shown in the able above, does not include royalty or crude sales.

“An analysis of tax collection figures in comparison to total revenue for the relevant period as set out in the table below will show that tax revenue has contributed an average of 41.45% of total federally collected in the six years analysed below. This ranges from a low of 30.04% in 2004 to a high of 45.36% in 2009, she noted.

At the REMM, the need for effective collaboration among the Units, Departments and Groups in order to close the non-compliance gap as well as ensuring effective and efficient service delivery to taxpayers was stressed.

The central theme of the REMM which featured other presentations is entitled “Closing the Compliance Gap through the Implementation of Self Assessment’’.

Other presentations  at the EMM include Ensuring Taxpayer Compliance in a Self Assessment Regime Using Effective Communication as a Veritable Tool; Achieving Voluntary Compliance through Self Assessment Tax Regime; Enhancing Compliance and Enforcement through Effective Debt Management in Full Assessment Regime and Repositioning the Audit Units for Optimal Performance in the Self Assessment Regime.

The REMM is a reflection of the Ifueko Omoigui Okauru led management team efforts to widen and deepen its decentralisation plan to improve tax collection.

The decentralization is designed to reach a greater number of officers and taxpayers at the regional levels to bear their minds and reflect on issues of effective and efficient tax administration in Nigeria.

The meeting  offered staff from the region the opportunity to share and harness ideas on tax administration in order to boost confidence on the entire system.