FIRS targets ₦19.4trn revenue in 2024

The Federal Inland Revenue Service (FIRS) has set an ambitious revenue collection target of 19.4 trillion naira for the year 2024, following an impressive performance that saw it surpass its 2023 target by a staggering 107 per cent. Adeyemi Adediran, Partner at Andersen Tax, discussed the agency's strategy and the country's tax reforms on CNBC Africa. Adediran commended the FIRS for its remarkable revenue collection in the first half of 2023, which amounted to 5.5 trillion naira. He attributed this success to the leadership of the new chairman, who has been proactive in enforcing tax collection and implementing reforms to enhance the FIRS's efficiency. One of the key pillars of the FIRS's strategy is a comprehensive reorganization to streamline its operations and enhance tax compliance. Adediran noted that the agency collected 12.3 trillion naira in the previous year and is now aiming for a significant increase to 19.4 trillion naira. To achieve this goal, the FIRS plans to leverage technology, target wealthy individuals for tax collection, and optimize the collection of Value Added Tax (VAT) and other indirect taxes. The agency's efforts are also in line with recommendations from the presidential committee on fiscal and tax reforms. The committee aims to simplify the tax system, reduce duplicity, and boost the tax-to-GDP ratio from 10% to 18% by 2026. Adediran emphasized the importance of aligning tax laws, government regulations, and tax policies to ensure coherence and efficiency in revenue collection. However, challenges remain, particularly in harmonizing the roles of state Internal Revenue Services and other tax collection agencies with the FIRS's newfound mandate as the sole tax collector. Adediran highlighted the need for extensive engagement and legal reforms to streamline the tax collection process effectively. In anticipation of the review of the 2017 National Tax Policy and potential changes introduced through the Finance Act, Adediran underscored the importance of aligning tax laws with current realities and ensuring coherence among various government regulations. He emphasized the need for a holistic review of existing tax laws to address inconsistencies and enhance tax policy effectiveness. Concluding the discussion, the conversation touched on the impact of debt servicing on revenue utilization and GDP growth. Adediran referenced proposals for creating a national asset register to boost government revenue and address issues such as inflation targeting and currency valuation. As the FIRS strives to achieve its record revenue collection target, the success of the agency's tax reforms and operational restructuring will be crucial in driving sustainable revenue growth and economic stability for Nigeria.