The Federal Inland Revenue Service, says it is proposing the introduction of Road Infrastructure Tax in Nigeria, to make the informal sector contribute to building a modern society.
The Executive Chairman of FIRS, Muhammad Nami, disclosed this on Thursday while receiving a delegation of the Nigeria Union of Journalists, led by its National President, Chris Isiguzo, in his office, in Abuja.
Nami said the proposed Road Infrastructure tax to be administered by FIRS, will provide government with adequate funding for road construction, rehabilitation, and maintenance, as well as providing the needed security for roads in the country.
He said “One quick and very important intervention required of you is in the area of the Road Infrastructure Funding Scheme that the country needs in order fix our roads and bringing the informal sector to the tax net.”
He noted that in many jurisdictions, road users pay for the use of road infrastructure, adding that this should not be seen as an additional burden on the people because it has the potential of making life better for all.
Speaking further, Nami stated that Nigeria’s economy presently relies heavily on non-oil revenues to discharge its statutory responsibility of paying salaries and providing social amenities to the citizenry.
“Without the tax that you pay, governments at all levels would not be able to fulfil their mandate to the electorates. Tax money also helps to ensure the roads you travel are safe and always in good condition,” he said.
He disclosed that the recent rise in the price of crude oil ordinarily should have impacted positively on the Petroleum Profit Tax payable by oil producing companies. However, it has shown otherwise due to some reasons.
On the challenges facing the service of delivering on its mandate, he said “Crude oil production has been limited by OPEC quota. Nigerian OPEC quota as of July 2021 was about 1.5mbpd as against its crude oil production budget of 1.8mbpd.
“This is a shortfall of 300,000 barrels per day. Our average daily crude oil production is around 1.250mbpd as against the allocated 1.5mbpd OPEC quota which has resulted in a shortfall of almost 250,000 barrels per day mainly caused by crude oil theft and force majeure declared by some of the IOCs.
“The total shortfall to FGN budgeted production is about 550,000 barrel per day.
“Huge losses brought forward and un-recouped capital allowances reported by most of the companies due to production shut in and the fall in oil price in 2020 as a result of the covid-19 pandemic which reduced their revenue. ”
He said with challenges in the oil and gas sector, reforms have been carried out by the agency with visible impact on the economy such as the deployment of technology in tax administration to improve domestic revenue mobilization in view of dwindling oil prices.
Nami added that the service created 10 Value Added Tax, VAT, Regional Coordination Offices across the country to drive collection of VAT.
He said, “We have commenced usage of VAT Form 002A for enrolment and tracking of branch offices of major VAT payers. This will certainly improve our VAT collection and capacity. We achieved 114.66 percent of our VAT collection target in the first half of the year.
“It will interest you to know that the Service collected a total of N4.2trn between January to September, 2021. This feat was achieved as a result of the efficiency and effectiveness of the TaxProMax Solution and intelligence/data we gathered, mined and analyzed in the period under review.
“The service successfully facilitated both the mock and external audits for the ISO 27001:2013 certification of the Exchange of Information centre, to meet international information security management standards.”
Earlier, the NUJ National President, said the visit of the union was part of his resolve to engage critical institutions as a key stakeholder in charting a way forward for the country’s collective good. (Punch)
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