Raising Nigeria’s IGR via Integrated Tax Administration System

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By Sani Adamu

Whatapp NewsTelegram News

By all accounts, the introduction of the Integrated Tax Administration System (ITAS) by the Federal Inland Revenue Service (FIRS),  appears to have boosted Nigeria’s Internally Generated Revenue (IGR) profile.

Financial analysts posit that this new method of tax collection, initiated by Alhaji Kabir Mashi, the Executive Chairman of the service, has also checked tax evasion.

They further note that the initiative has enhanced the capacity of the service to generate and remit more revenue to the Federation Account.

According to them, available records have shown that the FIRS ranks top as one of the major revenue generation organisations in the country.

Available statistics shows that the Federal Government has earned over N26.5 trillion as tax revenue through the service in the last 14 years.

In 2011 and 2012 alone, the service collected and remitted to the Federation Account more than N4.628 trillion and N5.07 trillion respectively.

The amounts, which were significantly higher than the entire total budget of N3.635 trillion for the 2012 fiscal year, according to some analysts, were the highest cumulative tax collections in the history of the organisation.

A recent report from the service indicates that the service generated N1.45 trillion as revenue from oil and non-oil taxes in the second quarter of 2014.

The report also indicates that N639.26 billion, representing 43.93 per cent of the collected revenue, was generated from Petroleum Profit Tax while N815.9 billion or 56.07 per cent was collected from non-oil taxes.

“The breakdown of the collection from non-oil taxes shows that N556.3 billion was realised from company income tax; N197.25 billion from Value Added Tax and N38.06 billion from Education Development Tax,’’ the report indicates.

According to it, collection from consolidated account during the period of the report is N12.03 billion; N7.6 billion from Technology Development Fund and N2.5 billion from Gas Income.

It shows that stamp duty accounted for N1.86 billion of the revenue while N290.4 million was realised from Capital Gain Tax during the same period.

According to the report, N312.49 billion  revenue was recorded in April, N569.21 billion in May and N573.45 billion in June, 2014.

Financial experts maintain that the tax revenue collected by the service during the period under review shows an increase of 15.54 per cent from about N1.05 trillion realised in the first quarter of 2014. [eap_ad_1] Mashi attributed the improvement recorded in revenue collection by the service to the introduction of ITAS.

According to him, his major priority is how to improve efficiency in FIRS revenue collection through the implementation of ITAS and improve staff motivation to ensure utmost performance.

He said ITAS had also assisted in automating the raising and posting of assessments, filing of Withholding Tax Credit, collation of arrears, risk analysis, production of reports and automated generation of demand letters to taxpayers.

“The system is also fast eliminating paper file movement in the service by replacing same with electronic systems to ease hiccups in procurement and payment system in the organisation,’’ he said.

Realising the strategic role of taxation as the most dependable source of income for the development of any country, Mashi urged FIRS staff to bring their technical know-how to bear in actualising the mandate of the service.

He, however, attributed the improved performance in revenue generation to the impact of the reform which began in 2002.

He said the improvement was a direct result of improved capacity building and training of workers, better working conditions and the provision of necessary working tools, including the use of modern technology in tax collection.

Nonetheless, Mashi admitted that the feat achieved so far was not without some challenges, such as creating a sustainable tax culture among Nigerians.

“A lot of tax payers still feel reluctant to comply with tax laws and they use all sorts of excuses.

“I will encourage everyone to pay their taxes and then wait and see whether government will use the taxes for development or not.

“A situation where you do not pay taxes and complain about lack of development is not the best.

“We should see ourselves as partners with government and revenue generating agencies to provide revenue for developing our country,’’ he said.

According to him, FIRS has introduced the Presumptive Tax Regime, which is an innovation in tax administration targeted at the informal sector or those running micro and small scale business.

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