By Cyril Ogar
Federal Inland Revenue Service, FIRS, Chairman, Dr. Zacchaeus Adedeji, since assumption of office has in no small way demonstrated he is a man of innovations with a view to scaling up tax accruals and shore up Nigeria’s earnings.
Adedeji’s innovations centres on ways of improving tax accruals to government, while erecting a bulwark to protect the masses from bearing the brunt of the vigorous tax direction. This is not an easy feat to achieve considering the delicate nature of Nigeria’s economic earners.
Notwithstanding, the challenges associated with plugging such innovations, no one has any doubt about Adedeji’s ability in service delivery. The man comes cradling over 15 years of experience traversing corporate accounting, public service administration, and public/private consultancy.
In the same vein, indications are on that the FIRS is working towards blocking tax leakages to ensure that more people are brought into the tax net.
He says there are leakages because several government agencies collect revenues.
Adedeji said. “The plan is to make sure everything we do as citizens is linked directly to NIN”,
“This would help address the issue of tax leakage”.
He, however, proposed that a bill would be sent to the national assembly to make it mandatory for Nigerians to have one means of identification which is the national identity number, NIN.
According to the FIRS chairman, a single revenue-collection agency is responsible for collecting revenue in other countries, which he noted is a better approach.
“But here in Nigeria we have more than 62 agencies collecting revenues one way or the other on behalf of the federal government”, Adedeji said.
“And when you see people (agencies) instead of going to their area of strength, everybody tries to collect (revenue) the leakage is all there”.
He maintained that the nation’s obsolete laws are also responsible for tax leakages.
“Most of them (laws) are obsolete. For example, the digital tax that we are talking about — no law in Nigeria empowers us to effectively tax all these digital businesses which we know is on the rise”, he said.
The FIRS boss said, President Bola Tinubu has approved that contractors should be paid directly instead of transferring the money to ministries, departments and agencies, MDAs, most especially capital funding.
He said this would enable the FIRS to deduct tax directly from the contractors and improve cash management.
“We are also doing a lot of reform, including the single window. Because if you look at FIRS, what we collect mainly is company income tax which is the result of the difference between cost of sales and gross sales”, he said.
“But the cost of sales if inflated means you would have less profits and less taxes. Today, we don’t have anywhere to confirm the major cost of sales of all these companies because when they do the valuation sometimes, they do not have verifiable value to do that.
“I use NIMASA as an example, the basis of (revenue) collection for NIMASA is three percent of FOB.
“That has nothing to do with marine. If you use the single window, you know the total number of vessels coming into the country and going out and the fee is just three percent. So, what does NIMASA need to do about that?
“What we are saying is that these agencies were set up to do core duties. When you talk about customs, it is border and trade facilitation. Revenue is not the core mandate of Customs. Customs is about border and trade facilitation.
“The real principle of the single window is that everything coming to the country is in advance, so you know the number of containers coming, the volume, what is there and you know the amount and they pay you once. When you do that, the customs collecting this and that or the NPA collection would seize to exist.
it is worth to note that “The FIRS now contributes about 70% of the nation’s total revenues. Yet, a lot of tax revenues are left uncollected”.
There’s no gainsaying the fact that Nigeria is becoming more heavily reliant on tax receipts injected into the economy, with emphasis on non-oil tax revenue. And this makes Adedeji the odil that lubricates the disparate parts of a machine that must work for Nigerians.
What better way to make good his promise than to commit to implementing the recommendations of the Quick Win report of the Presidential Committee on Fiscal Policy and Tax Reforms of President Tinubu “as they may apply” pending the approval of the president.
The imperative for getting it right when it comes to tax collection, especially eliminating multiple taxations and contribute huge resources into the national treasury, can’t be overemphasised.
Emphasis must however be on the support of all the well meaning Nigerians for whom the reforms and innovations are expected to affect. Whatever becomes of our collective ambitions, Adedeji is the poster boy that will lead us to that place of safety in tax administration.
From carrying out major reviews within the Service to introducing major worker-friendly policies, Zach is committed to raising the nation’s tax collection, but not at the expense of killing businesses.
Anyone who has listened to Adedeji speak will confirm his regular saying that President Bola Tinubu’s number one vision is to banish poverty; a reason he’s entrusted the critical agency to Adedeji, and more importantly, why FIRS’ plan under the Iwo-Ate born first-class graduate of accounting has been tax prosperity and not poverty.
This idea, the FIRS Chairman opines, is to tax returns, not investments, akin to taxing fruits and not the seed. The logic is that FIRS’ approach to tax administration in Nigeria is one of shared prosperity because its vision as a tax administrator is to access tax fairly, collect equitably, and keep it responsibly.
With an audacious target of N19.4 trillion naira this year, which is not far off from the nearly 13 trillion generated last year, Adedeji and his team at the FIRS believe it is doable, with commitment, integrity and purpose.
In order to make things work seamlessly and also to improve efficiency so as to alleviate the compliance burden on taxpayers and collectors, FIRS has had to migrate from the annual filing of Transfer Pricing Returns, and Country-by-Country Reporting, CbCR, notifications from e-TPPlat to the TaxPro-Max Platform, using their regular login credentials.
This, it must be noted, wasn’t without a human face, as the FIRS gave existing and prospective taxpayers up to June 30, 2024 to fulfil all pending filing obligations.
Apart from this, FIRS waived the administrative penalties previously imposed or to be imposed by the Service in accordance with the Income Tax (Transfer Pricing) Regulations 2018 and the Income Tax (Country-by-Country) Regulations 2018.
Believing that tax collection will help the present administration in achieving the majority of its electoral promises and put Nigeria on a firmer footing, FIRS, under Adedeji, places emphasis on taxpayers as those are the only customers it has.
At the recently held Commonwealth Association of Tax Administrators, CATA, management meeting held at Marlborough House, Pall Mall, London, which he is fortunate to lead as president, Dr Zacchaeus Adedeji, did not let it slide without calling on members of the global body for increased capacity building.
