FIRS: 70% Of N559bn June Allocation From Non-Oil Sector
In its bid to increase the nation’s revenue base,the Federal Government yesterday said 10 million new taxpayers, especially in the informal sector of the economy, would be brought into the tax net. The Chairman, Federal Inland Revenue Service (FIRS), Dr. Babatunde Fowler, who disclosed this at the 135th meeting of the Joint Tax Board (JTB) held in Abeokuta, also said no fewer than 27.5 million small scale business owners in the country are not paying tax.
He made the disclosure just as Governor Ibikunle Amosun of Ogun State called for an urgent review of the sharing formula of revenues accruing to the Federation Account through non-oil taxes, including Value Added Tax (VAT).
The meeting with the theme: “Presumptive tax regime for informal sector: A leeway to grow IGR,” had in attendance chairmen of Boards of Internal Revenue Service from the 36 states of the federation. Fowler, who led the JTB management team on a courtesy visit to the governor, said the Federal Government is committed to widening the tax net and maximise the potential of non-oil sector towards improving revenue generation.
According to him, 37.5 million small scale business owners are in Nigeria but only 10 million out of the figure were currently on the FIRS tax net. He said the agency planned to bring additional 10 million people into the tax net from the informal sector before the end of this year.
Fowler, who is also the JTB Chairman, explained that in the last six months about 700,000 corporate accounts had been brought into the tax net by the FIRS and the State Boards of Internal Revenue. While stressing the need to diversify Nigeria’s economy, the FIRS boss revealed that non-oil sector accounted for over 70 per cent of the N559 billion shared at the last Federation Account Allocation Committee (FAAC) meeting in Abuja. He said: “We have individuals in the informal sector and we also have corporate accounts.
Those in the small scale business areas claim they have over 37.5 million members. What we have on our database nationwide, as individuals, is only 10 million. That shows there is about 27.5 million individuals who are not paying taxes.
“We also have small enterprises, small businesses that are not paying taxes. But we, members of Joint Tax Board, all the states chairmen, have agreed to add a minimum of 10 million individuals before December 31st. So, we are going round the whole nation preaching the word, hoping that people realise that we cannot continue to rely on oil revenue.”
Fowler lauded the Ogun State government for its excellent performance in internal revenue generation, saying the state came first in 2015 as it grew its IGR base by 50 per cent. In his remarks, Amosun said states that are contributing more to the Federation Account through non-oil sector should be appropriately rewarded.
The governor, who described his state as the industrial capital of the country, lamented that the state was not getting its due derivation. Amosun said: “The non-oil revenue sharing formula currently in use is obsolete. As at the time it was done 20 years ago, Ogun State, for instance, was way back because of the number of industries we had then.
Today, Ogun State is the industrial capital of Nigeria. The sharing formula should reflect this new reality. This is derivation in another form. “It is a good thing that for the first time in the life of this administration, non-oil receipt accounted for over 70 per cent of the funds shared at the last FAAC. It is a commendable and a welcome development because it signifies a major shift in focus from oil to non-oil revenue. “But in the same token, I think it is very expedient to ask that we cast a second look at the formula we use in sharing the proceed from these non-oil revenues.
“If we make a lot of money from industries, we should also remember that these companies reside in a state and they put enormous pressure on the environment and the roads in those states. “Those various state governments carry the can and pick the bill for cleaning the environment. It is therefore only good for the management of RMAFC to give more back to those states hosting these companies.” Amosun also charged the JTB to devise creative strategies to ensure that more wealthy Nigerians are brought into the national tax bracket.
He said: “The rich and wealthy don’t pay taxes and even when they do, they underpay. They make a lot of money but don’t pay anything or don’t pay the requisite tax. “We all go to other advanced nations and see that these wealthy people don’t escape the way they do here. So, the challenge for the JTB is to correct this. You must think out of the box to achieve this.”
Culled from: https://newtelegraphonline.com/27-5m-business-owners-evading-tax-says-fg-2/