FIRS targets 17% tax to GDP ratio by 2023

The Federal Inland Revenue Service (FIRS) on Wednesday stated  it would raise Nigeria’s tax to Gross Domestic Product (GDP) ratio from the current 6 percent to 17 percent by 2023.

This is even as hinted of its plans to open tax offices in markets nationwide to bring tax services nearer to traders and improve their tax compliance rate.

Executive Chairman of the Service, Mr. Mohammed Nami, made these disclosures in Lagos when he met with over 100 officials of traders’ associations and unions as part of the agency’s ongoing public enlightenment tour of the South West region.

The tour is aimed at sensitizing taxpayers and collecting agents on the provisions of the 2019 Finance Act.

The tax expert said the meeting was aimed to educate traders and marketers on the benefits of the Finance Act 2019 to them and their businesses, especially as registered Small and Micro Enterprises (SMES).

Nami listed these benefits to include exemption from paying value added tax (VAT), the reduction of the Company Income Tax (CIT) from 30% to 20%, among others. He then urged the business owners to register their businesses officially, rather than operating informally, in order to access these benefits from the Act.

While stressing on the need for traders to charge VAT on applicable goods and services, especially on consumption, and remit it to the FIRS promptly, the FIRS Chairman urged the traders to separate their personal finances from their business capital in order not to lose their working capital to state tax bodies, stressing that doing so would help their businesses to grow as they pay less tax.

According to him, the FIRS is currently reviewing its Corporate Social Responsibility (CSR) activities to benefit the informal sector, including markets, in order to create a conducive business environment for them.

Nami stated that the ongoing reforms at the FIRS have decentralized key operations of the Service to make it easier to do business with the FIRS, including filing for Tax Clearance Certificate manually for it to be generated electronically on the Service’s Integrated Tax Administration System (ITAS).