…says COVID-19 lockdown, #EndSARS protest affected tax drive in 2020
…as Reps query increase in recurrent budget, revenue deficit
By Levinus Nwabughiogu-Abuja
Chairman, Federal Inland Revenue Service, FIRS, Mohammed Nami yesterday placed their revenue projection for 2021at N5.9 trillion.
Nami made the disclosure while meeting with the House of Representatives Committee on Finance led by Hon. James Falake on the Service’s 2021 budget defence and consideration of its proposed Revenue and Expenditure Estimates.
Out of the proposed figure, the Chairman said that non-oil and oil components were expected to generate N4.26 trillion and N1.64 trillion respectively.
He however put the cost of collecting the projected revenue at N289.25 billion against the budgeted N180.76 billion in 2020 to fund the three operational expenditure heads for the year.
He said: “Out of the proposed expenditure of N289.25 billion across the three expenditure heads, the sum of N147.08 billion and N94.97 billion are to be expended on Personnel and Overhead Costs against 2020 budgeted sum of N97.36 billion and N43.64 billion respectively. Also, the sum of N47.19 billion is estimated to be expended on capital items against the budgeted sum of N27.80 billion in 2020. The sum is to cater for on-going and new projects for effective revenue drive”.
Speaking on while the agency failed to realize the expected N5 trillion it targeted in 2020, Nami said that the lockdown occasioned by the Covid-19 pandemic and the #endSARS protest affected the drive for taxes.
Responding to a query by the Committee on why there was an increase in the recurrent expenditures of the Service for 2021, Nami attributed to the new salary structure occasioned by the recruitment of more staff.
He said there were about 1,800 staff recruited by the erstwhile management between 2019 and 2020, adding that the Service also carried of about 500 members of staff.
”There’s lockdown effect on businesses, implementation directive also for us to study, research best practices on tax administration which involves travelling to overseas and we also have to expand offices and create offices more at rural areas to get closer to the taxpayers, we pay rent for those offices and this could be the reason why all these things went up.
”And if you have more staff surely, their salary will go up, taxes that you’re going to pay on their behalf will go up, the National Housing Fund contribution, PENCOM contribution will go up. Those promoted you have to implement a new salary regime for them. There’s also the issue of inflation and exchange rate differential”, he said.
The chairman however gave hints of a marginal reduction in the taxable income of taxpayers due to the effect of the COVID-19 pandemic, ruling out a new recruitment exercise this year.
Earlier, members of the Committee had queried the increase in the budget and demanded an explanation on the shortfall in the 2020 revenue projection.
The lawmakers also raised concerns on the projected non-oil cost of collection of 4 per cent which was accrued to FIRS in 2020 and worth N137.411 billion.
They also demanded an explanation on the reason for the proposed 7 per cent cost of collection worth N298.411 billion for 2021.
“In his welcome remarks, the Chairman of the Committee, Falake said that it was their constitutional obligation to consider the proposed 2021 revenue and everything and report to the House.
“The Federal Inland Revenue Services (FIRS) to this all-important Legislative assignment on the consideration of the
FIRS proposed 2021 Revenue and Expenditure Estimates as submitted
by the Agency.
“The significance of this exercise cannot be overemphasized. As you are already aware, the Constitution of the Federal Republic of Nigeria 1999 (Amended) in Section 80 provides that all revenue raised under the Constitution or any other Act of the National Assembly shall be paid into and form part of the Consolidated Revenue Fund of the
Federation.
“Furthermore, subsection (1) states that no money shall be withdrawn from the Consolidated Revenue Fund of the Federation except in a manner provided by the National Assembly.
“In response to the above, the Federal inland Revenue Services as a responsible and law-abiding agency has therefore submitted the 2021 Revenue Estimates and Expenditure to this august committee for legislative scrutiny and consideration for the onwards further legislative business of the House of Representatives.
“On our part as a committee, we have the constitutional mandate under section 62(2)of the Constitution to discharge the onerous task of consideration and presentation to the plenary.
“We are obligated by the oath of membership under the same Constitution to do justice to this assignment.
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