96% of revenue spent servicing debts, says FIRS Chairman

The newly appointed Acting Executive Chairman of the Federal Inland Revenue Service (FIRS), Zaccheaus Adedeji, has lamented a situation where Nigeria spends 96 per cent of its revenue on debt servicing, saying the trend would be reversed soon.

Adedeji, who spoke during a handing-over ceremony at the FIRS Headquarters in Abuja, yesterday, said he would take urgent steps to reverse what he called an “unhealthy fiscal system”.

“We cannot afford to delay; we must act decisively to reverse this ugly trend. Our aspiration is audacious— to surpass Africa’s average tax-to-gross domestic product (GDP) ratio of 16.5 per cent and achieve an impressive 18 per cent within three years. By doing so, we aim to reduce our nation’s reliance on borrowing and ensure financial sustainability,” he said.

He said his goal is to nurture voluntary tax compliance by creating an environment where taxpayers willingly perform their civic duty.

“Our overarching goal is to nurture voluntary tax compliance by establishing a modern, dependable tax system that garners the trust and admiration of all stakeholders. Through this, we hope to create an environment where taxpayers willingly fulfill their civic duties.
“A fundamental aspect of our mission is to elucidate to taxpayers why their civic duty matters. We are committed to simplifying our tax system, making it accessible and comprehensible, thereby facilitating voluntary tax payments and fostering a sense of civic responsibility,” he added.

He, however, warned that those who evade their tax obligations will not be spared.

According to him: “We will enforce our responsibilities judiciously. We will implement a robust enforcement model that effectively deters tax evasion while maintaining fairness and transparency in our processes.”

He thanked his predecessor, Mohammed Nami, whom he said his tenure elevated the standards and commitment to excellence has set a remarkable precedent.
The new chairman also promised that under his watch, FIRS will place innovation, technology and fresh ideas at the forefront of its operations.
“This strategic focus will empower us to enhance efficiency, fortify against revenue leaks and bolster coordination and accountability within our organisation,” he said.

He added: “Quality data will be the cornerstone of our operations, enabling us to measure our progress, make informed decisions, and maintain the highest standards of accountability. We recognise that data-driven strategies are essential to our success.

“I pledge to maintain an open-door policy, actively engaging with stakeholders to collaboratively construct a tax administration that we can all take pride in. Together, we will build an institution that serves as a beacon of excellence.

“We are determined to align ourselves with President Bola Tinubu’s esteemed Fiscal Policy and Tax Reforms Committee. This collaboration will enable us to shape a prosperous fiscal landscape that empowers our nation’s growth and development.

Nami said the environment he met in 2019 when he assumed office was characterised by a weak administrative structure, inefficient processes (mostly manual), adversarial labour relations, insufficient funding and mutual mistrust between staff and management.

“The net effect was low staff morale, the Service struggling to fulfil its mandate, suboptimal performance, inadequate revenue to prosecute government programmes and low tax-to-GDP ratio,” he said.