We exceeded targets, Fowler replies Kyari’s query
The Executive Chairman of the Federal Inland Revenue Services (FIRS) Babatunde Fowler has replied a query by the Chief of Staff to the President Abba Kyari.
He insisted that the Service’s tax collection exercise actually surpassed past efforts.
Fowler, in his reply to the Presidency’s query, said the Service exceed its target in non oil tax collection by N1.304 trillion or 21 per cent between 2016 and 2018.
He attributed the decline in revenue between 2012 and 2014 to recession and fall in the price and production of crude oil within the period.
Fowler stated that, total actual collection from 2012 to 2014 was N14.5 trillion while total actual collection between 2016 and 2018 was N12.656 trillion.
“The highlight of these collection figures was that during the period 2012 to 2014, out of the N14,527.85 trillion, oil revenue accounted for N8,321.64 trillion or 57.28% while non oil accounted for N6,206.22 trillion or 42.72% and during the later period of 2016 to 2018, out of the N12,656.30 trillion, oil revenue accounted for N5,145.87 trillion or 40.65% and non oil revenue N7,510.42 trillion or 59.35%,” he added.
The FIRS management Fowler said, “has control of non oil revenue collection figures while oil revenue collection figures are subject to more external forces.”
As a result of these factors, the FIRS boss told Abba Kyari in his reply that “non oil revenue collection grew by N1,304.20 trillion or 21% within the period 2016 to 2018.
Fowler also drew Kyari’s attention to the fact that “total budget collection figure during 2012 to 2014 stood at N12,190.52 trillion compared to N16,771.78 trillion for the period 2016 to 2018 which represents an increase of 37.58%.”
With regards to non oil tax types, Fowler stated that there has been an increase as well. Between 2012 and 2014, CIT revenue was N2,957.50 billion while from 2016 to 2018 it was N3,488.90 billion. From 2012 to 2014, gas income was N35.18 billion while from 2016 to 2018 it was N196.68 billion. Gas capital tax from 2012 to 2014 was N31.20 billion while the same tax from 2016 to 2018 was N115.17 billion. Stamp duty collection from 2012 to 2014 was N25.92 billion while from 2016 to 2018 it was N30.62 billion.
VAT collections from non import and imports from 2012 to 2014, Fowler said amounted to N2,316.19 billion while from 2016 to 2018 it was N2,908.57 billion. From 2012 to 2014, the FIRS he said generated N657.39 billion from education tax and N488.35 billion from 2016 to 2018 from the same tax. Personal Income Tax (PIT) fetched the federation N152.46 billion from 2012 to 2014 and N252.28 billion from 2016 to 2018. NITDEF Fowler said was N28.88 billion from 2012 to 2014 and N28.72 billion from 2016 to 2018.
Fowler attributed the variance in the budgeted and actual revenue collection performance of the Service from 2016 to 2018 to “the low inflow of revenue for the period especially Petroleum Profit Tax (PPT) was due to fall in price of crude oil and reduction of crude oil production. Notwithstanding government’s efforts to diversify the economy, oil revenues remain an important component of total revenue accruable to the federation.”
He added that the price of crude oil fell from an average of $113.72, $110.98 and $100.40 per barrel in 2012, 2013 and 2014 to $52.65, $43.80 and $54.08 per barrel in 2015, 2016 and 2017. He also pointed out that there was a reduction in crude oil production from 2.31mbpd, 2.18mbpd and 2.20mbpd in 2012, 2013 and 2014 to 2.12mbpd, 1.81mbpd and 1.88mbpd in 2015, 2016 and 2017 respectively.
Fowler also pointed out: “the Nigerian economy also went into recession in the second quarter of 2016 which slowed down general economic activities. Tax revenue collection (CIT and VAT) being a function of economic activities were negatively affected but actual collection of the above two taxes were still higher in 2016 to 2018than in 2012 to 2014” Fowler said.
He added:“during the years 2012, 2013 and 2014, GDP grew by 4.3%, 5.4% and 6.3% while in 2015, 2016 and 2017 there was decline in growth 2.7%, -1.6% and 1.9% respectively. The tax revenue grew as the economy recovered in the second quarter of 2017.”
Fowler also noted that the strategy and initiatives adopted in collection of VAT during the period 2015 to 2017 led to approximately 40% increase over 2012 to 2014 collections. According to Fowler, “in 2014, the VAT collected was N802 billion compared to N1.1 trillion in 2018.” He attributed the increase to various initiatives such as ICT innovation, continuous tax payer education, and tax payer enlightenment embarked upon by the Service.”
Furthermore, Fowler said when his administration came on board in August 2015, “the target for the two major non oil taxes were increased by 52% for VAT and 45% for CIT. according to Fowler, “notwithstanding the increase, FIRS has in line with the Federal government’s revenue base diversification strategy, grown the non oil tax collection by over N1.304 trillion (21%) when the total non oil tax collection for 2016 to 2018 is compared to that of 2012 to 2014.
Fowler assured the Presidency that the Service’s strategy and initiatives going forward will improve revenue collections and meet the expectations of government.”
The Nation also reliably gathered that in one of the presentations made at the retreat from incoming minister, it was disclosed that “revenues have increased significantly since Q4 2018 in trillions of Naira.
