Sun, Sep

Public Debt Have Thrown Nigeria Into Revenue Crisis – New FIRS Boss


New chairman of the Federal Inland Revenue Service, FIRS, Dr Zach Adedeji, said the country is in deep revenue crisis which if no urgent step is taken to change the approach would throw Nigeria into bankruptcy. Adedeji stated this yesterday at the Agency headquarters while speaking on the leadership of his predecessor, Mohammed Nami, who noted that 96% of the country’s revenue is being spent on debt servicing, saying, is not sustainable.

This is despite Nami’s claim that the FIRS generated about N8.5trillion naira into the Federation account by mid September. 

Recall the reason behind the removal of subsidy was poor revenue that could no longer sustain the country’s expenditure. 

Adedeji said, “We are in a revenue crisis, government revenue is low amid a huge public debt.
Last year, 96 per cent of government revenue went into debt servicing. 

“Where debt has grown bigger than the Gross Domestic Product, GDP, and debt servicing faster than revenue, immediate actions have to be taken to remedy the situation.” 

Although he unveiled his new agenda on how to go about revenue generation saying “In this direction, therefore, we will key into the reforms being made by President Bola Tinubu who has since inaugurated a Presidential Fiscal Policy and Tax Reforms Committee. 

“The mandate of the committee is to, among other things, evolve an effective design and implementation of fiscal policy and tax reforms for economic prosperity. 

He explained “At FIRS, we will embrace efforts being made to design a tidy fiscal landscape for the country and in the process, address some of the obstacles impeding effective operations of the service as the primary agency of government responsible for administration, assessment, collection, accounting as well as enforcement of taxes and levies. 

“We need to innovate and build our operations on foolproof technology, while also evolving a hub of fresh ideas and creativity. “ 

Adedeji pledged to block all leakages in the system with the view to ranking in all tax revenues into government pocket. 

He added, “We must definitely plug leakages. We need to strengthen our internal processes and control mechanisms. We must put a high premium on effective coordination of assigned tasks and delegated responsibilities,’’ 

He vowed to stimulate voluntary compliance among taxpayers to fulfil their obligations as citizens, and his team will engage stakeholders and sensitise them on the need for voluntary compliance in tax remittance. 

In his statement, “Under me, we will not force things down the throats of our stakeholders. I will always be ready to engage with them, work with and through them, to jointly build a tax administration that we will all be proud of and one that enjoys the trust and confidence of all. 

“Broadly, we intend to come up with a menu of strategies that will stimulate voluntary payment of taxes and levies. 

“Yes, this is achievable because Nigerians acknowledge the need for the government to increase its revenue to be able to meet its obligations to them. 

“In doing this, we will build a tax system that is smart and modern, one with unquestionable integrity and will earn the trust as well as admiration of stakeholders.” 

Meanwhile, he charged management and staff to “work with uncompromising integrity, uphold taxpayers’ confidentiality, and demonstrate a high level of professionalism, fairness and show exemplary public service.” 

In his remarks, the outgoing chairman of FIRS, Muhammad Nami, disclosed, that the agency was on its way to setting new revenue record in 2023, having collected N8.5 as at September 14. 

Nami added that within the year under review, his administration assessed, and recovered another N4 trillion from the Nigerian National Petroleum Company Limited, NNPCL. 

He added that he had surpassed his 10 per cent Tax-to-GDP target of four years, having achieved 10.86 per cent in two years. 

According to him, the FIRS in year 2022 set a revenue target of N10 trillion and collected N10.1 trillion within the period. Similarly, in 2023, it set a target of N12 trillion in revenue and has collected N8.5 trillion, with about four months to the end of the year.