FIRS leverages digital platforms to widen tax net in N8trn revenue target

The federa linlan d revenue Service (FIRS) is to leverage digital platform sin widening the tax net to meet the N8trillion revenue projection of the governmnet for 2019. In growing the nation’s revenue through taxation to surpass the N5.3tn generated in 2018, the highest revenue reneration for the FIRS, there is a need to strengthen legislation on Nigeria’s digital economy.

Nigeria digital economy is estimated to worth $88bn by 2021 with a capacity to create about three million jobs. The FIRS in leveraging technology in tax collection, especially Value Added Tax (VAT), is to adopt the DSTV model.

Babatunde Fowler, the executive secretary of FIRS said DSTV is one of the first cooperate organisations in Nigeria to implement ‘VAT auto collect’, which has significantly increase on tax collection. “… as you pay your subscription to DSTV, the portion that is VAT is remitted straight to government and that is basically what we are calling on all corporate organisations to do including our state government,” said Fowler.

Fowler stated this at the 2019 FIRS stakeholders retreat themed, “Parliamentary Support for Effective Taxation of the Digital Economy” held in Lagos recently.

According to Fowler, the FIRS have deployed technology in to tax administration and collection to bridge the burden on tax payers. You can pay your taxes through your phone, on your banking application at no cost. So, in terms of the cost and even all cost of collection has gradually started going down. Basically we have to realise that those who pay taxes are those who make profit and those who earn income,” Fowler stated.

Speaking on the revenue generated in 2018 being the highest made by the service, Fowler said “It means it can be done – for the last three years the non oil revenue have exceeded the oil revenue; while the increase in tax payers has doubled within three years and Nigerians now realized the only way to get sustainable economy and get revenue is through taxation”.

Data from the FIRS also indicates a rise in taxes collected in comparison of non oil to oil revenue for 2016 – 2018. For non oil revenue, the services collected 64.99; 62.25; and 53.62 percent in 2016, 2017, and 2018 respectively, while oil revenue for the period under review was 35.01; 37.75; and 46.38 percent.

Babangida Ibrahim, the chairman House committee on finance said the National Assembly is ready to fast track legislative intervention for a digital economy. “I can assure you that anything that will bring improvement on revenue generation of government will be supported: anything that will assist government in deciding and implementing policy; we will support it,” said Ibrahim.

On the implication multiple taxation and burden of widening the tax net to bring in more revenue for government, Ibrahim said “There are many mechanism of widening the tax base; it is only when you widen the tax base that will enable you to collect more tax. Widening the tax base does not mean taxpayers are liable to pay tax – that is what most people do not understand.