Earnings from taxation accounts for 70 per cent of the monthly statutory revenue allocation from the Federation Accounts, the Federal Inland Revenue Service (FIRS) has disclosed.
The Executive Chairman of the agency, Muhammad Nami, said on Monday that with the negative impact of COVID-19 on other sources of revenue, tax has been keeping the Nigerian economy going.
Mr Nami spoke on Monday in Abuja during an Africa Independent Television (AIT) programme, Kaakaki, as part of his national public enlightenment on voluntary tax compliance.
“During the FAAC meeting in July, the total amount shared among the three tiers of government – federal, states and local – was N696 billion.
“From this amount, only 30 per cent came from revenue generating-agencies like the Nigerian National Petroleum Corporation (NNPC) and the Nigeria Customs Service (NCS).
“The remaining 70 per cent, which is almost N500 billion, came from tax revenues paid by the various tax payers, including stamp duty,” Mr Nami said.
He urged Nigerians and corporate organizations in the country to continue to fulfill their obligations by playing their taxes as and when due.
“Nobody wants to pay tax, even where it is clear payment of tax is necessary. There is never a time that is appropriate for somebody to pay taxes.
“What the federal, states and local governments share at the monthly federation accounts allocation committee (FAAC) meetings comes from the taxes paid,” the FIRS Chairman said.
Without the tax money, Mr Nami said there would be chaos and confusion everywhere in the country, as there would not be sufficient money to finance public projects.
Looking at issues relating to COVID-19 and its impact on businesses, he said the country’s economic situation would have been worse if people were not paying taxes, as people are actually losing jobs.
Noting that there was nothing new about stamp duty introduced in the country recently, Mr Nami said bankable Nigerians have been paying the duty on cheque books since the policy was introduced in 1939.
The renewed focus on stamp duty via the recent launch of an inter-ministerial committee on the recovery of stamp duty from 2016 till date has started to yield dividends.
“Before now, remittance from stamps used to be an average of about N17 billion and N18 billion per year. Currently, it is in the region of N80 billion,” he said.
The FIRS boss disclosed that a commercial bank which has not been remitting stamp duty to the government before bought in about N1.2 billion in July alone.
In recent weeks, controversy has trailed the decision by the tax agency to introduce the payment of six per cent stamp duty on all tenancy and lease agreements in the country.
Beyond the stamp duty, other major sources of tax revenue available to the government include the value added tax (VAT), Companies Income Tax (CIT), and Petroleum Profit Tax (PPT).
With declining oil revenue as a result of the impact of COVID-19 on the international crude oil market, Mr Nami said Nigeria is currently facing a serious economic crisis in terms of revenue accruing to the Federation.
He said the only way to ensure that Nigerians were happy with the government was to ensure that the deductions from people’s hard-earned income were remitted accordingly to government coffers.