He Federal Internal Revenue Service (FIRS) has announced that it collected over N10 trillion in tax revenue in the year 2022, the highest tax collection ever recorded in its history.
The Service disclosed this in its “FIRS 2022 Performance Update,” a report signed by its Chairman, Muhammad Nami, and released to the public on Monday, after his briefing with Chairman Muhammadu Buhari.
“FIRS, in the year 2022, raised a total of N10.1 trillion in oil (N4.09 trillion) and non-oil (N5.96 trillion) revenues against a target of N10.44 trillion.
“The corporate income tax contributed N2.83 trillion; Value Added Tax N2.51 trillion; Electronic money transfer rate N125.67 billion and assigned taxes N353.69 billion.
“Non-oil taxes contributed 59% of the total collection for the year, while the collection of oil taxes stood at 41% of total collection,” the report states.
It is the first time that FIRS will cross the 10 trillion naira mark in tax collection.
The Performance Update Report further clarified that the total amount of income includes the amount of N146,270 million, which is the total value of the certificates issued by the Service to private investors and NNPC for road infrastructure under the Program tax credit for investments in renewal and development of road infrastructure. Created by Executive Decree No. 007 of 2019.
The report also stated that the 10.1 trillion naira does not include tax exemption due to various tax incentives granted under the respective laws, which amounted to 1,805,040,163,008 naira.
Giving perspective to this unprecedented tax collection, FIRS noted in the Performance Update that the administration led by Muhammad Nami, upon taking office, devised a four-pronged approach, namely: administrative and operational restructuring; make the service customer-focused; create a data-centric institution; and automation of administrative and operational processes.
He further noted that throughout 2020 to 2022, the administration had introduced reforms bordering on these four-point foci that were producing results.
“The reforms introduced at different times in 2020 are slowly bearing fruit. By the end of 2022, the Service had completely restructured Service administration for maximum efficiency and achieved internal cohesion so that all functional units work in unison to achieve stated goals.
“As a result of the conducive environment created for staff, Service officers are doing their best on the world stage with international recognition and awards;
“The Service had also automated most of the administrative and operational processes. A major leap forward was the full implementation of TaxPro Max for comprehensive tax administration in June 2021. The module for the automated TCC went live on January 1, 2023, while taxpayers had already downloaded over 1,000 TCC this year without having to visit the FIRS office,” the report said.
It also noted that the Service had put its data extraction and analysis system into operation, allowing for the development of data-supported taxpayer profiles.
Other reforms the Service introduced in this period focused on detoxifying the tax environment by ridding it of mutual mistrust, negative tax morale and tax evasion, through effective taxpayer education, open engagement with stakeholders and improvement of services.
He noted that it is courtesy of these reforms, framed around the four focus points, that the Service was able to achieve this collection.
Commenting on the record N10.1 trillion tax collection achieved under his leadership, Mr. Nami, FIRS Chief Executive, stated that this was made possible by “dogged implementation of strategic reforms over the last two years; a renewed commitment from Service officials, accompanied by high morale; as well as the innovative deployment of technology for the automation of both the tax administration and the operational processes.
“This collection was possible thanks to the collaboration with our interest groups, from our colleagues in the Executive Power to members of the Judiciary, including our brothers and sisters in the National Assembly, as well as the tax advisory committee, professional associations, unions , and most importantly, our taxpayers.”
Speaking about the outlook for 2023, Mr. Nami stated that the Service would build on current reforms, achieve full automation, and continue to establish a resilient Service that would continue to provide sustainable tax revenues to finance the government.
“We intend to maintain and even improve momentum in 2023,” he stated.
“We have peaked, but this is certainly not our peak. In fact, my hope is that this is the minimum amount that the Service will collect in the future.
“Our goal is to identify more areas where we can improve the delivery and efficiency of our collection; and plug gaps, while implementing innovative reforms in data and artificial intelligence.
“Ultimately, we believe that FIRS can take responsibility for providing the necessary revenue for governments across the Federation to serve the needs of the Nigerian people through taxation.
“This is feasible once we get the much-desired support from all three levels and arms of the government, as well as from all stakeholders.”
FIRS thanked President Muhammadu Buhari for his support, as well as Minister for Finance, Budget and National Planning Zainab Ahmed and Minister of State Clem Agba.
“FIRS administration uses this medium to congratulate all patriotic taxpayers who paid their taxes correctly, stakeholders for their support, and Service officers for their dedication to duty.
“The Service also owes its achievements in 2022 to the effective leadership of the Honorable Minister of Finance, Budget and National Planning Zainab Ahmed, her brother, Minister of State Clem Agba, members of the National Assembly and the fatherly support of the President. and Commander-in-Chief of the Nigerian Armed Forces: Muhammadu Buhari.”
This is the second year in a row that the Service will record record tax collections.
In 2021, the Service achieved a record tax collection of N6.405 trillion, surpassing one hundred percent of its collection target for the year, as well as the first time the Service will cross the six trillion mark.
In 2022, building on the success of the previous year, the Service achieved a record fundraising of Naira 10.1 trillion, exceeding 96% of its fundraising target for the year, marking the first time the Service will cross the ten trillion.
This collection represents a jump of more than one hundred percent with respect to the collection of the Service in 2020, the first year of the current management of the Service.