The Chairman of Federal Inland Revenue Service, FIRS, Muhammad Nami, says revenue generated from stamp duty charges increased by 600 per cent from 2019 figures.
This, according to him, is because it was amore easy to collect such indirect taxes than direct taxes.
Nami said this in his welcome remarks at the 1st Annual Tax Dialogue hosted by the Federal Inland Revenue Service in Abuja on Thursday themed ‘Taxation in a Post-Covid-19 Economy’.
He said imposing taxes on spending rather than income had improved revenue generation for the agency because they were difficult to evade.
The FIRS chairman added that a review of the Value Added Tax from five per cent to seven per cent also led to improvement in the revenue generated from VAT collected last year.
He said, “One of the solutions is to shift tax on income to spending, which can easily be achieved than direct taxation.
“This is in consonance with the Nigerian tax policy, which provides that the tax system should focus more on indirect taxes, which are easier to administer and difficult to evade.
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“The VAT collected in 2020 exceeded that of 2019 by over 25 per cent due to the New Finance Act which reviewed VAT from five percent to seven percent, despite that the economic was shut down for five months.
“Similarly, the FIRS recorded improved revenue from stamp duties in 2020 to over 600 per cent of 2019 collection.”
Highlighting the challenges associated with taxation in Nigeria, Nami said inadequate tax education, disconnect among government agencies, trust deficit between the citizens and government was affecting revenue generation from taxes.
He called for the harmonization of government processes, improvement of collaboration among government agencies as well as harmonization taxes and incentives, in order to address the challenges.
“The challenges of tax administration in Nigerian is as a result of many factors, such as improper tax paying which evolved over time, inadequate tax education, disconnect among government agencies, trust deficit between citizens and government on the utilization of tax revenue, multiplicity of tax collecting agencies and advent of digitalized economy,” he added.
“You will agree with us that for taxation to grow beyond just being a mere tool for revenue generation, it must be seen as a mainstay of the economy, which serves the developmental needs of the citizens.”
Without a doubt, taxes today are defining factor for the functioning of government in all ramifications.
He said the agency was embarking on a digitalisation of its processes to ensure collection efficiency and transparency.
