An American lawyer and politician, Jerry Moran, once said, “Perfection has to do with the end product, but excellence has to do with the process.”
Without a doubt, the whole world has been afflicted and distressed with glaring economic and security challenges; the Covid -19 pandemic, political instability, the ongoing Ukraine-Russian war and other uprisings are grave setbacks whose ripple effects are impacting negatively on many countries, especially in Africa.
the giant of Africa and the most populous on the continent, has Boko Haram insurgency and banditry added to its cobwebs of problems which invariably affect the economy, particularly the Internal Revenue Generation, IGR.
But, no matter how bad the situation looks, hope is usual rekindled when those at the helm of affairs of critical sectors of the economy relentlessly put in their God given knowledge and experience in rescuing the nation from the hurdles rubbernecking it in the face.
Today, with uncertainties clouding crude oil revenue, the non-oil sector has become the alternative for economic survival – if those who know how to tap the revenue are saddled with the enormous responsibility. The job of alternative revenue generation, especially in a Nigeria facing the clear and present danger of losing its primary revenue source to aggressive innovation in technology, is one that must be approached with all sense of seriousness, responsibility and expertise.
This is even as tax experts have before now lamented Nigeria’s lackluster approach to taxation, as several tax streams appear to have been underutilised, or completely abandoned or still depending on obsolete practices.
The decision to appoint Muhammad Mamman Nami as the executive chairman of the Federal Inland Revenue Service (FIRS) has proved to be an inspirational substitution from a coach with deep foresight when the world, including Nigeria, was upended by the COVID-19 pandemic. It’s a fact that, besides the deadly health consequences of the coronavirus, the first and most consequential casualty of the pandemic was the global economy. And since Nigeria, a mono economy, depends almost wholly on multilateral trade, anything that threatens her source of foreign earnings becomes a catastrophe.
Faced, perhaps, with the most daunting task since independence as the global oil market went into a glut, Nami had to find a new means of shoring up the country’s income. He set out early to modernise the tax system, dropping obsolete practices in favour of global best practices. And it was this bold decision that kept Nigeria floating during the pandemic. For instance, in the first quota of 2020 alone, stamp duty earnings jumped to over N66 billion from the N18 billion recorded the previous year.
Also, under the leadership of Mr Nami, the FIRS collected about N6.4 trillion as taxes in 2021. The executive chairman gave the figure sometimes this year in Abuja at a public presentation and breakdown of highlights of the 2022 Appropriation Act.
Nami’s wealth of experience in this sector, cutting across years of auditing and tax advisory, was enough for him to understand that it may be impossible to pursue aggressive tax reforms under the legal framework he inherited. It was in keeping with one of his 4-point agenda which is “Rebuilding FIRS’ Institutional Framework” that he made lots of moves aimed at redefining the legal framework of FIRS.
In this regard, the Finance Act 2019, a landmark piece of legislation that amended the existing Stamp Duties Act, among others, which made it unambiguously clear that the FIRS is the sole competent tax authority to assess, collect and account for stamp duty relating to matters between a company and an individual or group of individuals in Nigeria, was very timely. The Act also expanded the list of dutiable items, as well as reviewed the amount payable. This was in a bid to equate Nigeria’s duty tax regime with global best practices.
Knowing that without innovative ideas, laws by themselves will not mainstream the kind of change that will manifest in the form of positive tax receipts, he oversaw the transition from the old system of postage stamps to the brand new Adhesive Stamps.
Furthermore, in a bid to plug many of the loopholes through which tax revenue is lost, FIRS committed to a huge investment in technology which has seen to the near elimination of human interface with customers while also making it convenient for them to remit taxes even from the comfort of their homes in keeping with his agenda of making FIRS a Customer-Centric Institution.
It was pursuant to this agenda, for instance, that the FIRS came up with the decision to create a window for taxpayers with outstanding liabilities, allowing them to enjoy an extended payment period while enjoying a waiver of penalties and interests during this period.
Nami identified collaboration with stakeholders as one of the agenda that will guide his stewardship of FIRS. This is perhaps why it is quite disturbing that anyone will start that Value Added Tax (VAT) conundrum. Although, discussing the salient points of the matter is subjudice, it offends the sensibility to imagine that anyone will want to challenge an efficient system, especially since it is the direction of global best practices just for sport. It becomes even more unfortunate when one considers that this FIRS has been more open to dialogue than any time in history.
Thanks to Nami’s Agenda of Making FIRS a Data-Centric Institution, everyone can see for themselves how efficient the Nami’s approach has been since 2019. A simple analysis of the data hosted in a dedicated data website of the revenue agency will reveal that it contributed over 60% of Nigeria’s revenue in 2019, 2020 and 2021.
Specifically, non-oil tax accounted for N3,147,6479 of the N5,261,9163 generated in 2019. The 2020 data was not different in that non-oil revenue accounted for N3,435,2311 of the N4,952,2245 generated in 2020 while in 2021, FIRS generated N6.4trillion.
The idea of FIRS to remain committed by setting up a team to visit all MDAs, NGOs and other corporate bodies, recovering unremitted taxes owed the federation by state and local governments, including visiting selected taxpayers and taxable persons to review their VAT and WHT records is also paying off coupled with the tax education embarked by the Service.
Therefore, in spite of the glaring economic challenges, Nami is making relentlessly effort in making this country financially stable.
Hayatudeen writes from Kaduna, Kaduna state.
