Budget 2016: Inland revenue targets N5tr revenue

The Federal Inland Revenue Service (FIRS) is planning to  generate N4.95tn revenue in the 2016 fiscal period to fund the federal government budget.
Speaking yesterday during the unveiling of the Service’s corporate strategy, the Executive Chairman, FIRS, Mr Babatunde Fowler, said a total of N2tn is being projected to be generated from Value Added Tax, N1.87tn from Companies Income Tax, N800bn Petroleum Profit Tax, N180bn from Education Tax and the National Information Technology Development Fund’s N20bn.
“We have proposed a revenue target of N4.957tn for 2016. This target is largely dependent on non oil collections and in particular, VAT will account for N2tn while CIT is expected to account for N1.87tn.”
“Between them, these two taxes are expected to provide almost 80 per cent of our collection in 2016. We therefore have our work cut out and there is no room for complacency.”
Speaking on the 2015 performance, he said the Service was able to generate a total sum of N3.74tn out of its target of N4.57tn.
Giving a breakdown, Fowler said from the VAT, the sum of N767.33bn was generated out of a revenue target of N1.28tn.
He said out of a target N1.48tn for PPT, the Service was able to generate N1.28tn while in the area of CIT, the Service collected a total sum of N1.29tn from the target of N1.51tn.
He said, “The above performance is clearly unacceptable and is not a reflection of our capacity. I am particularly not pleased with the very poor VAT collection, which based on my previous  experience at the state level in the administration of tax similar to VAT, should be high yield and easy to collect.
“It is our expectation that you will not only meet, but surpass this 70 per cent threshold because if we meet only 70 per cent of our target, then government will be unable to fund the 2016 budget.”
In his remarks at the event, the Minister of Budget and National Planning, Udo Udoma, said the reforms being carried out in agencies of government have provided a platform to generate additional revenue from non-oil sources.
He said the country had yet to take advantage of its size as the largest economy in Africa to generate enough revenue from non-oil sources as Nigeria’s tax to Gross Domestic Product ratio still falls below global average.
The minister stated that Nigeria’s tax revenue performance is 7.4 per cent of GDP compared with 27.4 per cent in South Africa, 18.7 per cent in Malawi and 19.5 per cent in Kenya.