Connect with us
Advertise With Us


Non-oil Sector Contributed 54% Of N5.32trn 2018 Revenue – FIRS



FIRS Executive Chairman, Babatunde Fowler

The Federal Inland Revenue Service (FIRS) yesterday disclosed that the non-oil sector contributed about 54 per cent of the N5.32 trillion revenue it generated in 2018.

Babatunde Fowler, FIRS Chairman, disclosed this in Lagos during an interactive forum on Tax Matters with the Manufacturers Association of Nigeria (MAN).

Mr Fowler noted that the manufacturing sector and other sectors under the non-oil sector have overtaken the oil sector in contributing immensely in terms of revenue generation to the nation’s economic growth.

He said that the Ease of Paying Taxes sub index under the World Bank’s Ease of doing business ranking shows that Nigeria currently ranks 171 out of 190 countries, having moved up 11 places from its 2017 ranking.

According to him, several initiatives were evolved to improve revenue collection and compliance, while reducing the cost of collection.

He said that the agency has lifted the lien placed on tax defaulters bank accounts for 30 days to allow them regularise their tax positions while apologising to businesses that were wrongfully affected by the accounts freeze.

Mr Fowler criticised the perfidy of businesses who collect Value Added Tax (VAT) and fail to remit to the government, saying era of tax evasion was over.

He said that FIRS in collaboration with the Joint tax Board and the Small and Medium Enterprises Development Agency of Nigeria (SMEDAN) forged a partnership to improve the level of voluntary tax compliance by operators in the Micro, Small and Medium Enterprises sector.

Mr Fowler said that to support the growth of the sector, interests and penalties for unremitted taxes were waived for tax defaulters, a proposed special tax regime was being developed and commitment to patronise 40 per cent of locally produced goods.

Earlier, Mansur Ahmed, President of MAN, said that the association aligns with FIRS objective, which was part of the transformation initiatives of the present Administration that seeks to create a more prosperous and diversified economy.

“This is of significant importance, given the role of manufacturing in the industrial and economic development of our country and the concomitant effect on employment generation, technology acquisition, and wealth creation.

“Moving the government’s revenue away from oil dominated foreign earnings to more predictable sources have the potential to accelerate the country’s economic growth,” he said.

Mr Ahmed commended FIRS’ role in the last three years; acknowledging that revenue from taxes has significantly improved and becoming another credible source of government’s yearly budget funding.

“This is minimising the vagaries and volatility associated with oil prices at the international market,” he said.

Meanwhile, the federal government recorded 8.96 per cent increase in revenue generation through Value Added Tax (VAT) in the last quarter of 2018, according to latest data that was released by the National Bureau of Statistics (NBS)

Sectoral distribution of Value Added Tax data for Q4 2018 showed that the sum of N298.01 billion was generated as VAT in Q4 2018 as against N273.50billion generated in Q3 2018 and N266.73billion in Q2 2018 representing 8.96 per cent increase quarter-on-quarter and 17.28 per cent Year-on-Year.

Manufacturing generated the highest amount of VAT with N28.82 billion generated and closely followed by Professional Services and Commercial and Trading both generating N24.12 billion and N16.02 billion respectively.

Mining sector generated the least; closely followed by Pharmaceutical, Soaps & Toiletries and Chemical, Paints and Allied Industries with N35.75 million, N209.33 million and N258.39 million respectively.

Out of the total amounted generated as revenue from VAT in the fourth quarter of 2018, N138.42 billion was generated as Non-Import VAT locally, while another N47.89billion was generated as Non-Import VAT for foreign.

According to the NBS report, N111.71 billion was generated as Import VAT by the Nigeria Customs Service (NCS).

VAT has helped to increase Nigeria’s non-oil revenue profile since 1994 when it was introduced and it is still a reliable source of non-oil revenue.

Economic experts, including the International Monetary Fund (IMF) have urged the Nigerian government to raise VAT by at least 200 basis points. The argument is that proceeds of VAT increment would help in infrastructural developments that helps to drop the cost of doing business and citizen transactions to create headroom for consumption which would spur business growth.





%d bloggers like this: