Chairman, Federal Inland Revenue Service (FIRS), Dr. Zacch Adedeji, on Monday, said the country’s tax-to-GDP ratio currently stood at 13.5 per cent, compared to 10 per cent at the inception of the current administration.
Adedeji said FIRS aimed to further beat Africa’s average of 15 per cent and achieve 18 per cent tax to GDP by 2027.
He also revealed that the country’s revenue to debt service had been brought down to 50 per cent, from about 90 per cent, in two years.
The FIRS chairman spoke in an interview to commemorate his two-year stewardship at the Revenue House.
He also said tax payers should expect a fair tax administration that will come without hassles next year, when the new tax laws will come into effect.
Adedeji said the service had helped to reform the fiscal landscape, and consequently change the revenue structure of the federation.
He said within two years, reform initiatives embarked upon by the service and the administration of President Bola Tinubu had yielded the desired outcomes.
Adedeji, who spoke on sundry issues in tax administration, said for the first time, the three tiers of government shared a record monthly allocation in excess of N2 trillion.
He pointed out that states and local government councils were now more empowered to carry out their responsibilities to Nigerians in their domains following their improved fiscal conditions.
He also emphasised that about 70 per cent of what the three tiers of government received from federation coffers came from tax revenue collected by FIRS.
The FIRS chairman said federal allocations to states had grown by about 70 per cent, enabling them to enjoy a great level of fiscal stability and debt management.
He stated, “According to the figures from DMO, about 30 states repaid N1.85 trillion in debt over 18 months. We should keep these figures in perspective when X-raying this administration.”
Adedeji added, “This is an eloquent testimony to the reforms spearheaded by President Bola Ahmed Tinubu.
“So, all credits must go to the president for the courage he has demonstrated in leadership by setting the economic fundamentals right in order for the reforms to bring plenty fruits and gains for the federation.
“By removing subsidy on petrol and collapsing the hitherto dual exchange rate windows, floating the Naira consequently, the health of the federation account has blossomed greatly, as there are no bogus subsidy claims that would naturally have depleted the accruals into the pool.”
Adedeji said Tinubu had fulfilled his promise to make businesses flourish by removing all burdens and hurdles.
He said, “In addition to these, the president in his inaugural speech, promised to make his industrial and economic policy one that will remove hurdles in the way of businesses.
“As a follow up to that, he set up a committee which worked so hard with other stakeholders to bring about the new tax laws that will go into effect from January next year.
“This is the best thing that has happened to Nigeria’s fiscal ecosystem since Independence in 1960.
“The president has fulfilled his promise to make businesses flourish by removing all burdens and hurdles.”
According to him, “This has been done with the new tax laws which will eliminate multiple taxes. The president said we should not have more than single digit tax types and that has been achieved now.
“The various tax laws which are scattered in several legislations have now been consolidated and streamlined into a single document.
“Tax is not easy to collect anywhere in the world and it will be made more difficult if taxpayers go through unnecessary hurdles before they can pay taxes.”
Speaking on the potential impact of recent tax reforms, Adedeji said the biggest deal for Nigerians was that food, education, shared transportation, agriculture would be VAT-free.
He said, “The fact that these laws were scattered in various legislations gives room for different applications and make compliance cumbersome. But all that is history now.
“This will have positive effect on more than 80 per cent of Nigerians. This is in addition to the tax adjustment of personal income of those in the low-income brackets.
“Small businesses with turnover of N50 million will not pay tax. All these go to show that President Tinubu is a compassionate leader who knows there the shoes pinch for businesses.
“A more business-friendly environment has now been created with these new laws.”
James Emejo
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