Will New FIRS Boss Make Any Difference in Nigeria Revenue Crisis? ContdfromPg.22

Senior SpecialAssistant, Media and Publicity to the President, Malam Garba Shehu, the new FIRS boss is armed with almost three decades of practical work experience in auditing, tax management and advisory and management services to clients in the banking, manufacturing, services and public sectors as well as non-profit organisations.

Director, Union Capital Market Ltd, Mr. Egie Akpata, is of the opinion that the new FIRS Chairman is coming into the role at a very challenging time for Federal Government finances.

“Given the macroeconomic indices, it would be difficult for the FIRS to meet its short term revenue targets. It is important to realise that FIRS does not collect personal income taxes which is left to the states. In an economy dominated by the informal sector and SMEs, it is hard to see where the increase in FIRS revenue is expected to come from. Tax paying corporates are already overburdened by a 32 per cent marginal tax rate, which is very high on a global scale. So there is no room to increase the corporate tax rate. 2.5 per cent GDP growth is unlikely to produce incremental taxes from the existing tax compliant companies,” he said.

Akpata believed the FIRS would need to significantly increase the number of tax paying companies.

According to him, the use of technology and banking information could help bring more companies into the tax net. Also, a much larger workforce would be needed by the FIRS to properly track down these tax defaulters, he noted.

Akpata, however, suggested that, if the FIRS wants to radically change their income profile, something radical needs to be done. “A lower corporate tax rate should be considered to encourage other non-tax payers to become compliant. The current 32 per cent rate is high enough to discourage businesses from complying,” he stated.