2016 tax collection slumps to N1.2trillion
• Records 12-year Low Collection Rate
• Economist Blames Adeosun
• Insiders Claim Unreported Sums May Push It To N3Trillion
Indications have emerged showing that the Federal Government shifted emphasis on taxes back to the traditional resource-base of financing of its yearly budget, because the performance of tax revenue in the out-gone year was very dismal.
At a collection figure of N1.2 trillion as at December 31, 2016, the collection fell grossly below both the government target and the Federal Inland Revenue’s [FIRS self-imposed target of N5 trillion.
Those figures, independently obtained by The Guardian at the weekend represents a 12 – year low revenue collection, dating back to year 2004 when the tax agency raised the sum of N1.194 trillion.
However, a top insider of the tax agency spoke to The Guardian on condition of anonymity, because the collection figure is still being held under wraps by the management.
He confirmed that the actual collection figure that has hit the agency’s tax remittance portal, being held at the Central Bank of Nigeria (CBN), is N1.2trillion, noting that there are still some collections on behalf of the Tax Agency by sister agencies like the Nigerian Customs Service and from the Airlines, which are yet to hit the records.
The official confidently maintained that by the time those collections are reported, the figure may ramp up to over N3 trillion, representing some 75 per cent of the N5trillion, the agency set for itself.
Meanwhile, a closer study of the tax remittance table cited by The Guardian indicates that of the N1.2 trillion collections, the sum of N482.924m has been pocketed as collecting fees.
This is made up of N362.198m and N120.731m, representing 15 percent for the collecting banks and 10 percent for InterSwitch respectively, for collecting the taxes and switching them to the CBN, while the balance has been sent to the CBN.
Further breakdown indicated that non-oil formed the major bulk of the collection, with oil contributing only the sum of N167.013bn.
The annual summary of tax collection from year 2000 to last year indicates that the highest collection was recorded in the tenure of Mrs. Ifueko Omoigui Okauru, with the sum of N5.007tr in year 2012 following hi-tech and revolutionary tax administration reforms introduced then.
That feat was an Olympian jump from a paltry N455.3bn contribution of taxes in year 2000 and after her tenure, the feat is yet to be equaled as collection has been pointing south from N4.805tr in 2013, to N4.714 in 2014 and N3.741 last year; and a likely slump below N2tr this year, if figures reported by the Minister of Budget are anything to go by.
Officials of the Federal Ministry of Finance were not available when The Guardian called yesterday, to provide insight on the development, as calls to their phones could not connect.
However, a senior director at the FIRS on Friday, revealed that the collection is a reflection of the recessionary pressure on the Nigerian Economy.
According to the staff who asked not to be named: “How do you expect greater tax collection in an environment that is almost comatose? Go around, more businesses are shutting down or are either not doing well.
“How can you collect taxes from such businesses. Don’t forget taxes are got from profit. So, if there are no businesses can you still tax such entities?” the staff queried.
When contacted, Head of Corporate Communications of the agency, Mr. Wahab Gbadomosi, said he was out of Abuja and could not speak on the matter.
But, reacting to Nigeria’s failing tax ratio to GDP, a Development Economist, Mr. Odilim Enwegbara, said the development was confirmation that the Minister of Finance was yet to understand the kind of tax policy Nigeria requires to get the country off oil reliance and diversify the economy.