Nigeria targets 80% of revenues from non-oil sector – FIRS boss

The Executive Chairman, Federal Inland Revenue Service (FIRS), Mr Tunde Fowler has said that Nigeria would earn at least 80 per cent of her revenues from the non-oil sector of the economy in the next three years.

Fowler who spoke today at the Nigeria-Canada Investment Summit in
Abuja noted that the non-oil sector contribution to the Nigerian
economy has risen to 60 per cent by November 2019 from 54 per cent in
December 2018.

He also noted that the continuous drop in the oil prices is a sign that
attention should be focused on the non-oil sector of the economy which he
said is more sustainable.

“We are moving from oil dependent to non-oil dependent economy. We
believe that in the next three years, the non-oil sector is going to
contribute at least 80 per cent of the total revenue. You may ask
where is that going to
come from. It is going to come from Agriculture”, he said.

He said the strategies that FIRS is adopting to realise improved revenue
collection are: “auto VAT Collection: there is automation of VAT collection
in key sectors which facilitates reduction in compliance cost in the long
term; there is system to system integration between banks and FIRS; VAT
collection in the banking sector went live in January 2017 and from Jan-Oct
2019 collected N25.6bn so far; VAT collection in the Cable TV sector went
live in Dec 2018 and generated N5.1bn so far from Jan-Oct 18 2019.

“Integrated Tax Administration System (ITAS) project is a suite of programs
that enables the automation of FIRS tax processes. As part of the Service’s
objectives to bring high-level efficiency to tax revenue collection and
provide first class services to taxpayers, ITAS project introduced SIGTAS,
a solution that covers all aspects of tax administration in one integrated
system.

“Government Information Financial Management Information System
(GIFMIS) is an interface linking FIRS to the OAGF for real-time
exchange of information and data; State Offices of Accountant General
Platform (SAG); Automated the deduction at source and remittance of
VAT and WHT from State governments contract payments
directly to FIRS’s account and so far collected N13bn”, he said.

He noted that the deployment on online solutions, is making tax
administration more efficient, transparent and convenient

Some of the FIRS services which could now be accessed electronically are:
taxpayer registration (through e-Registration); payment of Stamp Duties
(through e-Stamp Duty); payment of taxes (through online payment: e-tax
pay); receiving of electronic receipt after payment of taxes (through
e-Receipt);  filing tax returns (through e-filing) and online Tax Clearance
Certificates (TCC) through electronic Tax Clearance Certificate (e-TCC).

Fowler who also spoke on various tax incentives in Nigeria said Nigeria
needed award on the international scene on the number of reliefs and
incentives it grants to both local and foreign businesses.

“Sometimes when I look at these tax incentives and reliefs, I feel that
Nigeria is the Father Christmas. But that is necessary for the growth of
the economy because they attract investors”, Fowler said.

He urged foreign investors to consider Nigeria as their first option
because of attractive tax incentives and reliefs and attractive end-price.

Fowler said there are attractive tax incentives and reliefs in Personal
Income Tax Act, Companies Income Tax Act, Capital Gains Tax Act, Value
Added Tax Act, agriculture and foreign investment.

For instance, under the Personal Income Tax (PIT), Fowler noted that the
following tax reliefs are provided by the Personal Income Tax Act (PITA).

“There is Tax Credit Allowance. Tax credit allowable against tax payable on
income derived from outside Nigeria if brought into the country through
Government approved channels;

“Consolidated Relief Allowance. Section 33 (1) of PITA allows a Relief
Allowance of N200,000 subject to a minimum tax of 1% of gross income
whichever is higher, with the balance taxable in accordance with the
Income table in the Sixth schedule to PITA.

“Returns Not To Be Filed Where Income Is N30,000 or Less. Section 43 PITA
provides that no return of income shall be filed by a person whose only
source of income in any year of assessment is employment in which he
earns N30,000 or less from that source.

“Income Exempted. Section 19(1) PITA specifies several incomes that are
exempted from tax, in the Third Schedule to the Act.

“Exemption of Interest on Loan Granted by Banks. Section 19(7) PITA
exempts interest on any loan granted by a bank to a person engaged in:
(a)
agricultural trade or business; and (b) the fabrication of any local plant
and machinery.

“Exemption of Dividend from Tax. The Third Schedule to PITA lists
incomes exempted from Personal Income. Tax Paragraph 25 of the. Third
Schedule to PITA exempts some dividends from tax”, said Fowler.

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