How FIRS generated N5.5trn from taxes in six months — ‘highest half-year revenue ever’

The Federal Inland Revenue Service (FIRS) says it generated N5.5 trillion as tax revenue in the first half of 2023.

In a statement on Thursday, Johannes Oluwatobi Wojuola, special assistant on media and communication to the chairman of FIRS, said the figure is the highest tax collection ever recorded by the service in any first six months of a fiscal year.

Giving a breakdown of the tax revenue, Wojuola said the service achieved 88 percent of its target from oil revenue and exceeded its target for non-oil tax.

“Tax revenue collected from the oil sector from January to June 2023, stood at N2.03 trillion, as against a target of N2.3 trillion; while non-oil tax collection stood at N3.76 trillion, as against a target of N2.98 trillion,” he said.

“The service collected a total of N1.65 trillion tax revenues in June 2023. This sum is the highest tax revenue collected by the service in any single month.”

Commenting on the revenue inflow, Muhammad Nami, executive chairman of the FIRS, was quoted to have attributed the performance to improved voluntary tax compliance enabled by the automation of FIRS’ tax administrative processes.

“This is a good head start as we work towards meeting our target for the year. And it was achieved despite stubborn headwinds such as the impact of the currency redesign and the 2023 general elections on the economy in the first and second quarters of 2023,” Nami said.

“This half-year performance was achieved as a result of improved voluntary tax compliance by taxpayers, the continued improvement of automation of our tax administration processes, including the updated VAT filing processes; as well as our dogged engagement with stakeholders in both the formal and informal sectors of the economy.

“We believe that the performance in the second half of the year would be better considering the continuing improvement to our tax administration processes and positive impact of the current government’s policies on the economy.”

In 2021, the FIRS said it generated N6.4 trillion as revenue.

Out of this figure, according to the agency, company income tax stood at N1.896 trillion, petroleum profit tax was N2.008 trillion, and value-added tax (VAT) was at N2.07 trillion.

But checks by TheCable showed that the petroleum profits tax declared by FIRS at the federation accounts allocation committee (FAAC) meeting was N1.2 trillion and not N2 trillion.

This showed a discrepancy of N800 billion in the FIRS’ data.

TheCable’s analysis on the issue can be read here.

In 2022, the service also said it generated N10.1 trillion as revenue and described it as the highest tax collection ever recorded in the agency’s history.

(Cable)