By Ayo Yusuf
Nigeria is in the midst of a revenue crisis as debt servicing outstrips revenue generation, the new boss of the Federal Inland Revenue Service, FIRS, Dr Zacch Adedeji, has said.
Speaking at the handover ceremony of his predecessor, Muhammad Nami yesterday, Dr. Adedeji warned that, “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.”
The new FIRS chairman noted that about 96 per cent of Federal Government revenue was spent on debt servicing last year and warned that the situation is not sustainable.
Recall that one of the main reasons why the Federal Government removed subsidy from petroleum this year was because the nation lacked enough revenue to run the affairs of the country.
According to Dr. Adedeji: “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.”
On his agenda to optimise revenue generation, he said: “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.
Further Adedeji added that “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.”
The FIRS chairman said he will stimulate voluntary compliance among taxpayers to fulfill their obligations by engaging with them on the need for voluntary compliance.
He said, “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.”
Dr. Adedeji charged management and staff to “work with uncompromising integrity, uphold taxpayers’ confidentiality, and demonstrate a high level of professionalism, fairnessformer and show exemplary public service.”
In his remarks, the chairman, Muhammad Nami, disclosed that the agency was on its way to setting a new revenue record in 2023, having collected N8.5 as at September 14.
He added that within the period under review, his administration assessed, and recovered another N4 trillion from the Nigerian National Petroleum Company Limited, NNPCL.
Mr. Nami said he had surpassed his 10 per cent Tax-to-GDP target of four years, having achieved 10.86 per cent in two years.
He said the 18 per cent target in four years, set by the current administration was not only achievable but could be surpassed.
In 2022, the FIRS 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.
