Why Estimating Amount FG Loses To Agencies’ Deductions Is Difficult – FIRS Ex-Chair
By Juliet Vincent
The immediate past Executive Chairman of FIRS, Mr. Muhammad Nami, in an interview with Guardian newspaper, acknowledges that estimating the exact amount the federation is losing due to deductions by revenue-generating agencies like NNPC and NIMASA may be difficult because it requires specific data and analysis.
He noted that those deductions impact the nation’s revenue because some of the Revenue Generating Agencies (RGAs) have been underperforming.
He said some of them (unlike FIRS and Nigerian Customs) have been remitting only operating surplus to the government.
“In other words, while FIRS, Customs, and NUPRC only enjoy between 4–7 per cent of the gross revenue generated by them, the rest of the RGAs remit ‘operating surplus’. The implication of this is that these RGAs generate, spend, and decide what to remit to the government for social services, critical infrastructure, and others,” he said.
While acknowledging the fact that the new NRS has the potential to streamline tax collection and improve revenue generation in Nigeria, he observed that the new agency will have to contend with some fundamental challenges, which include infrastructure and capacity gaps; coordination with state and local governments; as well as digitalization and tax compliance.
To address the above potential issues, Mr Nami said that the implementation of a robust digital system will enhance tax collection, reduce leakages, and improve efficiency.
“Providing training and capacity-building programmes for NRS personnel will ensure they are equipped to handle their responsibilities,” he said, adding that engaging with state and local governments, taxpayers, and other stakeholders will facilitate smooth implementation and address concerns, while establishing clear guidelines and regulations will provide clarity on tax administration and compliance requirements.
“With effective implementation and mitigation of potential challenges, the agency can play a crucial role in supporting the nation’s economic development,” he concluded.