The Albino Foundation Public Notice
The Federal Inland Revenue Service (FIRS) has expressed confidence in meeting its ambitious target of an 18 percent tax-to-GDP ratio by 2026.
This, the FIRS said can be achieved through the integration of technology, enhanced processes, and comprehensive capacity-building efforts as key drivers of success.
This disclosure was made by the Executive Chairman of FIRS, Dr. Zacch Adedeji, at the Workshop on Enhancing Tax Compliance and Revenue Generation for Accountant-Generals and Directors of Finance in Abuja on Thursday.
Dr. Adedeji emphasized that the FIRS is committed to transforming tax administration through innovative strategies aimed at boosting compliance. According to him, the integration of advanced technology and streamlined processes has already significantly enhanced tax collection efficiency, positioning the FIRS to achieve the targeted 18 percent tax-to-GDP ratio.
“It is important to emphasize what the Federal Inland Revenue Service has achieved through the integration of technology, improved processes, and capacity building. These advancements have not only enhanced tax compliance but have also positioned us to meet our target of an 18 percent tax-to-GDP ratio by 2026,” Adedeji stated.
Adedeji noted that the FIRS, along with other government agencies, shares a unified vision to ramp up revenue generation for Nigeria’s growth and development, with the ultimate goal of improving the lives of its citizens. He pointed out that the goal however, is not to increase tax rates, but rather to block revenue leakages and ensure full compliance with existing tax laws.
“Our focus is not on raising tax rates. Instead, we are concentrating on closing loopholes, enhancing transparency, and ensuring that all taxpayers comply with existing tax regulations. This approach will allow us to achieve significant growth in revenue without placing undue burden on businesses and individuals,” Adedeji remarked.
A key initiative of the FIRS has been the simplification of the tax remittance process, particularly through the centralized payment system. This system assigns the responsibility of tax remittance to Accountant-Generals, who handle payments on behalf of various government agencies. This has been instrumental in ensuring the swift and efficient remittance of taxes such as Value Added Tax (VAT), Withholding Tax (WHT), and Stamp Duties.
“The centralized payment system has greatly improved the speed and accuracy of tax remittances. By having Accountant-Generals manage these payments, we have been able to ensure that all taxes are remitted in a timely manner, which has significantly boosted our overall tax collection,” Adedeji explained.
In line with its goal of easing the tax burden on businesses and individuals, the FIRS has recently reduced the WHT rates, shifting the focus from taxing revenue to taxing profits. This move aims to create a more business-friendly environment while ensuring that the government collects its due share of profits.
Adedeji acknowledged that while the reduction in WHT rates may initially result in lower tax revenues, the long-term benefits of expanded tax compliance and a broader tax base would more than compensate for this shortfall.
“While reducing WHT rates may temporarily lower our tax collection, we believe that the gains from enhanced compliance and greater cooperation between businesses and the government will help us recover and even exceed our targets in the long run,” Adedeji said.
In her address, the Accountant General of the Federation (AGF) Dr. (Mrs) Oluwatoyin Madein highlighted the role of state governments in national revenue generation.
She stressed that the contributions of state Accountant-Generals and Directors of Finance are crucial to Nigeria’s fiscal health, urging them to adopt effective strategies and best practices in tax remittance and reporting.
“The role of state governments in driving revenue generation cannot be overemphasized. By providing clear guidance and empowering our stakeholders at the state level, particularly the Accountant-Generals, we can ensure that the best practices in tax remittance are adopted across the country,” Madein said.
The AGF called for sustained collaboration and innovation among all stakeholders to ensure Nigeria’s long-term fiscal sustainability. She emphasized the need for continuous capacity building, innovation in tax administration, and improved collaboration between federal and state tax authorities.
“Let us continue to collaborate, innovate, and support each other as we strive to ensure the long-term fiscal sustainability of our nation. We have an obligation ahead of us, and together, we can achieve the core values of this administration, which are focused on simplifying taxes, enhancing compliance, and ensuring fairness and equity in the tax system,” Madein remarked.
