The Federal Inland Revenue Service, FIRS, has proposed the introduction of Road Infrastructure Tax in Nigeria, to make the informal sector contribute to building a modern society.
Executive Chairman of FIRS, Muhammad Mamman Nami, disclosed this yesterday, while receiving a delegation of the Nigeria Union of Journalists, NUJ, led by its National President, Chris Isiguzo, in his office, in Abuja.
“Nami said the proposed Road Infrastructure Tax to be administered by the federal agency, would provide government with adequate funding for road construction, rehabilitation, and maintenance, as well as provide the needed security for roads in the country.
He said: “One quick and very important intervention required of you is in the area of the Road Infrastructure Funding Scheme that the country needs in order to fix our roads and bring the informal sector to the tax net.”
“In many jurisdictions, road users pay for the use of road infrastructure, as such it shouldn’t be seen as an additional burden on our citizens because it has the potential of making life better for all of us.”
Speaking further, Nami stated that Nigeria’s economy currently relies heavily on non-oil revenues to discharge its statutory responsibility of paying salaries and providing social amenities to the citizenry.“According to him, without payment of tax, governments at all levels will not be able to fulfil their mandate to the electorate.
He stressed that tax money also helps to ensure that the roads were safe and always in good conditions, disclosing that the recent rise in the price of crude oil ordinarily should have impacted positively on the Petroleum Profit Tax payable by oil producing companies.
‘However, it has shown otherwise due to some reasons,” he said.
On the challenges facing the service for delivering on its mandate, the FIRS boss said: “Crude oil production has been limited by OPEC quota. Nigeria’s OPEC quota as at July 2021 was about 1.5mbpd as against its crude oil production budget of 1.8mbpd.
This is a shortfall of 300,000 barrels per day. Our average daily crude oil production is around 1.250mbpd as against the allocated 1.5mbpd OPEC quota which has resulted in a shortfall of almost 250,000 barrels per day mainly caused by crude oil theft and force majeure declared by some of the IOCs. The total shortfall to the federal government budgeted production is about 550,000 barrel per day.
“Huge losses brought forward and unrecouped capital allowances reported by most of the companies due to production shut in and the fall in oil price in 2020, as a result of the covid-19 pandemic which reduced their revenue.”
He said with challenges in the oil and gas sector, reforms have been carried out by the agency that are visible on the economy. These he listed included the deployment of technology in tax administration to improve domestic revenue mobilisation in view of dwindling oil prices in order to avoid falling into debt crisis.
Nami added that the service created 10 Value Added Tax, VAT, Regional Coordination Offices across the country to drive collection of VAT.
“We have commenced usage of VAT Form 002A for enrolment and tracking of branch offices of major VAT payers. This will certainly improve VAT our collection and capacity. We achieved 114.66 percent of our VAT collection target in the first half of the year.
“It will interest you to know that the Service collected a total of N 4.2 trillion between January to September, 2021. This feat was achieved as a result of the efficiency and effectiveness of the TaxProMax Solution and intelligence/data we gathered, mined and analyzed in the period under review.“”The Service successfully facilitated both the mock and external audits for the ISO 27001:2013 certification of the Exchange of Information, EOI centre, to meet international information security management standards,” he said.
While congratulating Isiguzo for his recent reelection as the National President of NUJ, which was a reflection of his uncommon achievements at the NUJ, he urged NUJ members.
Earlier, Isiguzo, said the visit of the union was part of his resolve to engage critical institutions as a key stakeholder in charting a way forward for the country’s collective good.
The NUJ president described FIRS as a vital institution in the country, which, “requires all the support it needs especially at a time when the country is security-challenged, adversely affected by Covid-19 and faced with FOREX crisis as well as political intrigues from different parts of the nation.”
He said the NUJ has noted closely the FIRS’ “strident efforts to shore up the country’s revenue by deploying technology and the requisite personnel in this regard. Of interest to the Union is your digital technology solution, TaxPro-Max.
“The numbers show that it has assisted in boosting efficiency in tax administration and collection rates across the country.
“However, with your recent admission that only about 44 million out of a possible 100 million plus that pay tax makes it urgent for a robust integrated media campaign to get more Nigerians into the tax net. This the NUJ is willing to spearhead.”
Isiguzo assured the FIRS boss and his management team that the NUJ would commend the agency where it has done noble.