In line with Federal Government’s shift in economic focus to the non-oil sector, the Federal Inland Revenue Service (FIRS) has proposed a revenue target of N4.957 trillion for 2016. In the proposal, revenue from the non-oil sector accounts for 80 per cent. Of the figure, Value Added Tax (VAT) is expected to rake in N2 trillion, representing 40.35 per cent while Company Income Tax (CIT) will pool N1.877 trillion (37.87 per cent).
Both are projected to form 80 per cent of organisation’s revenue collection in 2016. Other components of FIRS revenue target for the year include Petroleum Profit Tax (PPT), N800 billion; CIT, N1.877 trillion; Education Tax (ET) N180 billion; Consolidated Tax (CT), N80 billion, while National Information Technology Development Endowment Fund (NITDEF) is expected to contribute N20 billion to the target.
The Executive Chairman of FIRS, Mr. Tunde Fowler, confirmed the figures in Abuja yesterday at the 2016 corporate strategy retreat.
The retreat, with the theme: ‘Optimising nonoil tax revenue collection through compliance and enforcement,’ had in attendance top management officers of FIRS and states’ internal revenue board chairmen. The 2016 revenue target is higher than the 2015 target of N4.572 trillion of which FIRS was only able to collect N3.743 trillion due to significant drop in oil taxes. It was also unable to meet the target for non-oil taxes, VAT and CIT. Addressing FIRS management officers and chairmen of states’ internal revenue board, Fowler said that the agency would not only meet the revenue target, but also surpass it.
He enjoined the FIRS staff to brace up, adding that payment of bonuses would be tied to performance. He said: “This is necessary as we will introduce an enhanced system of performance to ensure that we all meet our targets since our ability to fund the organisation is directly tied to our collection.
“As part of this enhanced performance system, we have increased the threshold for payment of performance bonus from 60 per cent to 70 per cent. It should be noted that if indeed we are to receive performance bonuses, then our performance target should be met 100 per cent.”
He noted that the need for FIRS to review its strategy for revenue generation from oil to nonoil became imperative with the challenge that comes with low oil prices and dwindling revenue from oil sources.
In his goodwill message, the Minister of Budget and National Planning, Senator Udo Udoma, represented by the Permanent Secretary in the ministry, Mrs. Fatimah Nana Mede noted that the revenue projections for the 2016 budget were articulated by the government in close collaboration with FIRS and other revenue generating agencies.
Meanwhile, Senate President Bukola Saraki has said that premium should be placed on the non-oil and independent revenue generating sources if the 2016 Budget is going to be realistic and successful. Saraki yesterday said the Eighth Senate will focus attention on the revenue generating areas and to ensure that all leakages are blocked.
When asked if the 2016 budget is implementable in view of the dwindling price of crude oil at the international market, Saraki said: “I think this is one of the reasons why we are having the ministries, departments and agencies (MDAs) defend their proposals before the committees to be able to test some of the scenarios and some of the assumptions, particularly on the revenue side.
If you look at the revenue, out of about N3.8 trillion, N3 trillion is coming from non-oil and independent revenue. “The success of the budget, in my own view is less on the benchmark. It is more on those two items – non-oil revenue and independent revenue – and that is why we directed our Committee on Finance and other relevant committees to really scrutinise the revenue side,” he said.
Target
VAT = N2trn
CIT = N1.877trn
PPT = N800bn
ET = N180bn
CT = N80bn
NITDEF = N20bn
