The Federal Inland Revenue Service (FIRS) says it has captured over 700,000 fresh companies doing various businesses in various sectors of the Nigerian economy. This is to help the federal government realise tax revenues to fund the economy out of the current recession.
The FIRS Chairman, Tunde Fowler, told Reuters that about 10 million individuals on the tax agency’s radar watch may also be compelled to defray their outstanding tax liabilities to government on or before December.
The Nigerian government has come under pressure in desperate search for alternative funding for an ambitious $15 billion (N4.72 trillion) fiscal stimulus plan to speed up the economic recovery process.
Government is equally planning to raise about $1 billion through Euro bond capital issue, as well as sourcing for loans from various multilateral and international lending institutions including the World Bank, African Development Bank, and others, Finance Minister Kemi Adeosun said.
Besides, she said, government is also considering proposals from a recent ministerial retreat, supported by some members of the National Assembly, for the sale of some of the country’s oil and gas assets to raise capital.
How to find money to finance the over N6.06 trillion 2016 budget has been a major headache for government, with the impact of dwindling oil revenues casting looming shadows.
Earnings from oil have remained abysmal since last year, with global oil prices still very low, with OPEC Secretariat calculations showing light sweet crude futures trading at $43.27 per barrel on Thursday, against $42.54 the previous day.
Mr. Fowler said part of the strategy to mobilize revenue locally to pursue the economic recovery agenda included efforts by FIRS to step up its tax drive, to realize and surpass its over N4.95 trillion target for tax revenues, from the N3.73 trillion set the previous year.
“Persuading Nigerians to pay tax is no easy task,” Mr. Fowler said, while expressing optimism that the target would be met before the end of the year.
He said the agency has so far realized about N2.3 trillion between January and August, despite the difficult times the country’s economy is currently undergoing.
On areas contributing significant revenue to the government for the period, Mr. Fowler said the value-added tax (VAT) increased by about 25 per cent over last year’s figures.
Corporate income tax earnings, he said, has equally improved significantly over the same period, although he lamented the negative impact of declining global oil prices on petroleum profit tax from the joint venture operators.
Part of the agency’s strategy to meet its target, he explained, included unleashing inspectors from the newly created tax monitoring unit in the service to update taxpayers’ databases, capture new businesses and individuals under the tax net, by tracking and checking their tax payment records.
He said the drive resulted in the addition of over 700,000 companies that never paid taxes before from their businesses over the years, while about 10 million individuals across the country were also added.
Part of incentives to encourage payment of taxes by corporate citizens and individuals, he said, include a proposed waiver to be granted on interest and penalties for the period between 2012 and 2015 to allow people and businesses pay only the principal amount of tax liabilities due.