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Revenue: Future of crude oil bleak, taxation only sustainable source – FIRS boss

Per Second NewsSeptember 30, 2021290

By Ajuma Edwina Ameh

The Executive Chairman, Federal Inland Revenue Service (FIRS), Muhammad Nami, says the future of crude oil as a major source of revenue for the country is very bleak.

According to him, taxation remains the only sustainable source of revenue anywhere in the world, Nigeria not an exception.

Nami, who said this at the 7th NGF IGR Learning Event with the theme, ”Setting the social minimum through tax for service programme” on Wednesday in Abuja, believed that taxation remains the most veritable tool in addressing the imbalance between the ‘haves’ and the ‘have nots’ in the society.

Decrying Nigeria’s overdependence on revenue from crude oil, he argued that oil revenue is no longer sustainable as the market for fossil fuel continues to deplete due to complications arising from COVID-19 pandemic.

The FIRS boss also said the shift from fossil fuel to other cleaner sources of energy, rising cost of exploration, banditry, oil theft, among others have made dependence on oil revenue unrealistic.

“Beyond the use of taxation for balancing social-economic standing of citizens, it is a contribution that members of the society make in order for their leaders to provide them with social amenities in appropriate quantity and quality. In short, it is the price paid in anticipation of decent living conditions.

“Governments at various tiers must, in view of the constitutional provisions, imbibe the culture of ‘value-for-money’ or, put in proper perspective, ‘value-for tax-money’.

“The citizens should not just hear budget figures but must, within their immediate living quarters, feel, see and experience effects of tax revenue.

“It is important for governments at all levels to come together to fight tax evasion and touting which are negatively impacting tax revenue,” the FIRS chairman noted.

Nami called on the subnational governments on the need to adopt right tax policies that will ensure adequate funding for the much needed socio-economic infrastructure.

He also observed that 22 years of Nigeria’s democratic rule the legislative arm of government at both state and national level has yet to put in place committee on tax

“It is surprising. We must see taxation in its proper context such that all arms of government; legislative, executive and judiciary, should accord it due attention.”

Also speaking, the Chairman of Nigeria Governors’ Forum and Governor of Ekiti State, Dr Kayode Fayemi, said the domestication of various reforms over the past six years, yielded an annual growth of 12% from N687 billion in 2015 to NGN1.21 trillion by 2020.

He listed the reforms to include legal revisions, policy directives, institutional restructuring, and technological innovations to improve tax administrative processes and procedures.

According to Fayemi, the theme of the event was to bring together critical stakeholders, policy makers and professionals to discuss and proffer innovative strategies to assist States achieve their revenue potentials.

He said: “Over the last six years domesticating various reforms advocated by this platform, states have recorded a compound annual growth of 12% from NGN687 billion in 2015 to NGN1.21 trillion by 2020.

“Although, the COVID-19 pandemic contributed strongly to the decline recorded, our tax effort (tax-to-GDP) as States is estimated to be less than 3%.

“Advancing beyond our current revenue levels will warrant more systemic reforms to address low tax morale and voluntary compliance by taxpayers.”