How FIRS recorded N8.5tn revenue deficit under Buhari

The Federal Inland Revenue Service (FIRS) recorded a revenue shortage coming to N8.5 trillion within a five-year period from 2015 (when the Buhari administration took over power) to 2019, data gleaned from the agency has revealed.

The data demonstrated that the FIRS earned about N21.4 trillion as revenue from taxes compared with the revenue collection target of N29.9 trillion set by the Federal Government for the five year period.

Interestingly, the data further indicated that the service surpassed its annual revenue target in each of the five years (beginning from 2010) preceding the Buhari presidency.

Year-by-year analysis reveals that N2.84 trillion was achieved in revenue collection in 2010 when the target was N2.55 trillion. By implication, the FIRS surpassed its target for that year by N290 billion.

The positive development was sustained in 2011 when the service posted N4.62 trillion as its revenue collection achievement, outstripping its target by N990 billion.

It generated N5 trillion in 2012 relative to the revenue target of N3.63 trillion, translating to a surplus of N1.37 trillion.

Read also: 7 things you need to know about the new FIRS Chairman

The service generated N4.81 trillion and N4.71 trillion for 2013 and 2014 respectively as against revenue targets of N4.46 trillion and N4.08 trillion. It exceeded its targets by N337 billion and N629 billion in 2013 and 2014 in that order.

Beginning from 2015 however when Babatunde Fowler took over as the agency’s chief, the FIRS has been experiencing a reversal of fortunes, as its revenue collection performance fell below the set targets.

Mr Fowler had, during his term, introduced the use of tax consultants, an import from his days as the Director of the Lagos State Revenue Service, into the FIRS revenue collection process.

The practice persisted amidst the controversy generated by the discovery that thousands of the agency staff could provide the same services the tax consultants were engaged to deliver.

Despite the expansion in the FIRS workforce during this time, the revenue collection performance of the agency has been negative since 2015. Between 2016 and 2019, the agency’s workforce grew from 7,162 to 9,448.

The FIRS recorded revenue deficits of N830 billion and N1.6 trillion in 2015 and 2016 respectively when N3.74 trillion and N3.3 trillion were achieved in revenue collection as against targets of N4.57 trillion and N4.9 trillion.

The FIRS posted N4.04 trillion, N5.32 trillion and N5 trillion in 2017, 2018 and 2019 respectively relative to set targets of N4.89tn, N6.74tn and N8.8tn in those years.

Muhammad Nami, the new FIRS Chairman, in his Christmas message to the revenue service last Monday, disclosed that “despite the rise in Service workforce, the engagement of consultants, the rise in inflation and the exchange rates, the tax revenue collection (of the FIRS) continues to dwindle.”

The presidency, through the Chief of Staff to the President, Abba Kyari, had queried Mr Fowler on 8th August 2019 regarding “observed significant variances between the budgeted collections and actual collections for the period 2015 to 2018.”

It questioned Fowler’s inability to meet his collection target from the inception of his tenure in 2015.

According to Garba Shehu, presidential spokesman, Fowler’s term was not renewed on expiration on the ground that the president deemed the performance of the agency under him to be very poor.

Mr Fowler, in responding to the query, attributed the deficit recorded in actual tax collection performance from 2015 to 2018 to fall in the price of crude oil as well as recession.

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