PIA’ll Deplete Tax Revenue, FIRS warns

Federal Inland Revenue Service (FIRS) Chairman, Mohammed Nami, said though the law may affect revenue expected to be generated from Petroleum Profit Tax next year, government revenue is expected to increase significantly in 2023.

Speaking at an interactive session on the 2022-2024 Medium Term Expenditure Framework and Fiscal Strategy Paper at the House of Representatives, he said the FIRS is projecting to pay N10.104trillion into the Federations Account in the 2022 fiscal year.

Nami said: “We expect that with the new Petroleum Industry Act, there are some reconciliations that will be carried out that might affect the projections for 2022. We expect that there are new expenditures that will be rolled over to the new regime.

“So, what we are trying to do is to ensure that we adjust those expenses for the year 2022.

“We know that if we do that, it is going to affect our ability to collect more revenue in that area. There are currently some allowances they have been able to use, but they will use them because this will be a new regime.

“It is not going to be the one that has investment tax allowance anymore. It is going to be based on actual performance.

“But we are going to recognise whatever they have now as a cost before you arrive at the actual profit they are going to generate.

“So, what we have planned to do is to aggressively conduct audits and investigations in the year 2022.

“We are projecting that by 2023, the result of that audit will begin to manifest. That is why we have projected 2023 to be N6.2 trillion.”