FIRS targets N10.1 trn revenue in 2022, fears drop in petroleum profit tax

• …As Reps ask Service to extend revenue drive to Twitter, Facebook, others

By Christiana Ekpa

The Federal Inland Revenue Service (FIRS) is targeting N10.1 trillion revenue in 2022 financial year, out of of which N2.053 trillion will be remitted to the Federal Government with the remaining balance for states and local governments areas.

This was just as the FIRS expressed worry that the signing of the Petroleum Industry Bill (PIB) into law will negatively affect government revenue expected from the Petroleum Profit Tax next year.

FIRS Chairman, Muhammad Nami disclosed this Wednesday at the ongoing 2022-2024 Medium-Term Expenditure Framework and Fiscal Strategy Paper (MTEF & FSP) interaction with the House of Representatives Committee on Finance and Ministries, Departments and Agencies (MDAS) at the National Assembly Complex, Abuja.

Nami said the Service generated a total revenue collection of N4.950 trillion against budgeted N5.076 trillion representing about 98%, adding that the non-oil component contributed N3.435 trillion and and oil aspects brought in N1.515 trillion.

According to him, the cost of collectIon (4% net of 2% Nigerian Customs Service

NCS VAT) of N130.45 biiiion was achieved against the budget of N180.76 billion to fund the three operational expenditure heads for the year.

Reviewing the 2021 budget performance, the FIRS Chairman said: “The Service 2021 approved MTEF projected revenue collection was N6.40 trillion representing N1.64 trillion (26%) and N4. 76 trillion (74%) for oil and non-Oil respectively.

“The Service as at June 30, 2021 (half year) achieved N2.762 triliion representing 43% of approved projected revenue collection. The non-oiI reveneue collection during the period was N2.118 trillion against N1.5 trillion collected in the correspondIng period representing 41. 2% Increase.

“While the oil revenue collected for the same period was N644 biiiion against N971 billion collected in the corresponding period representing 33.68% decrease in the oil collection”.

He assured that there was possibility of going beyond the revenue target for 2022 as the implementation of the Tax-pro Max technology has started impacting positively on revenue collection, evident by the June, 2021 coIIectIon of over N650 billion which was the highest revenue realised in a single month recently.

On the impact of the PIB on revenue generation, NAMI said: “We expect that with the new Petroleum Industry Act, there are some reconciliations that will be carried out that might affect the projections for 2022. We expect that there are new Expenditure that will be roll over to the new regime. So, what we are trying to do is to ensure that we adjust those expenses for the year 2022.

“We know that if we do that, it is going to affect our ability to collect more revenue in that area. There are currently some allowances they have been able to use, but they will use it because this will be a.new regime. It is not going to be the one that has investment tax allowance any more. It is going to be based on actual performance.

The lawmakers asked FIRS to include

Twitter and Facebook as part of their assumptions to increase revenue as well as extend its tax drive to the informal sector which is a veritable area to get more money to finance the budget deficit, instead of borrowing.

Chairman of the Committee on Finance, James Faleke who commended the Service for its efforts in generating revenues charged it to do more so as save the country the consequences of borrowing to fund budget.