Federal Inland Revenue Service (FIRS) yesterday revised its total collections for the first quarter (Q1) of 2020) from N1.11 trillion to N1.20 trillion, representing 15 percent increase or N156 billion higher than the N1.04 trillion recorded in the corresponding quarter of 2019.
Earlier this month, the service had reported that it generated a total of N1.11 trillion in the review period before issuing a final computation yesterday.
FIRS, in a statement yesterday by its Director, Communications and Liaison Department, Mr. Abdullahi Ahmad, attributed the improvement in revenue generation to widespread policy reforms and institutional re-organisation initiated by the agency’s Executive Chairman, Mr. Muhammad Nami, since assuming office in December 2019.
“Traditionally, Q1 collection results have been notoriously low as a result of limited economic activities within the period, which business analysts trace to the festive hangover of the New Year celebrations, delay in budget presentation, which was a New Year ritual in the country for decades under the military, limited clarity about government policy directions after the budget had been presented and consumer spending caution and limited liquidity following lavish festivities of preceding December month and January 1 New Year celebrations,” the statement said.
It noted, however, that the historic final performance in Q1, 2020 was particularly remarkable as the period coincided with two adverse global developments on individuals, businesses, and nations – a global fall in the price of crude oil price, which is the country’s foremost cash cow, and the shutdown of the global economy by the COVID-19 pandemic.
However, performance in the review period showed an astronomical increase in collection trends as Capital Gains Tax (CGT) recorded a 568 per cent increase to N643,935,849.06 compared to N96,408,740.90 in the corresponding quarter of last year.
Also, Gas Income Tax rose by 420 per cent from N2,977,345,332.31 in Q1,2019 to N15,489,264,736.92 in Q1,2020 as Petroleum Income Tax (PPT) further increased by nine per cent.
Other taxes, including Companies Income Tax (CIT), increased by 152 per cent to N102,610,369,777.73 in Q1 compared to N40,696,980,658.52 in the preceding quarter of 2019, while the Value Added Tax (VAT) increased by 27 per cent at the customs level and 13 per cent at the non-import level.
Stamp Duty tax increased by 40 per cent from N3,386,648,663.85 in Q1 2019 to N4,750,893,578.48 in Q1, 2020.
The statement, however, added that the passage of Finance Act 2019 led to a drop in Withholding Tax rate from five per cent to 2.5 per cent in some sectors.
“The Act also tinkered with pre-operational levy (levy paid by taxpayers to obtain TCC) thereby resulting in a five per cent collection in Q1, 2020, a drop from seven per cent in Q1, 2019.
“With the full takeover of PAYE and PIT in the FCT by FCT-IRS, the FIRS lost all FCT collection, which led to the fall in both Pay As You Earned (PAYE) and Personal Income Tax (PIT) for Q1, 2020,” the statement added.
Source: THISDAY
