When the music is good to our ears, we dance. And if we cannot dance, then we clap. Or we do both!
This piece is not to sing the praises of a government agency without rhyme or reason. It is a fact based opinion piece on the historic feat of the Federal Inland Revenue Service (FIRS) in recording its highest ever tax collection of N10.1 trillion in a single year.
The first indication that FIRS could cross the N10 trillion mark came in September last year when it collected N7.5 trillion in tax in nine months to surpass its entire 2021 figure of N6.4 trillion.
It was at that point that it became obvious that the reforms introduced by Muhammed Nami within a year of assuming office as FIRS Executive Chairman in 2019, had began to yield dividends.
Indeed the fruits of those reforms began to show in 2021, one year after the global lockdown caused by COVID-19, with a tax collection figure of N6.4 trillion,which at the time was the highest ever revenue recorded by the Federal tax agency.
Even at that, the 2022 target of N10.4 trillion looked like a tall dream. Not because of capacity or the lack of it, but because adding N4trillion to the historic figure of the previous year simply looked unattainable at a time much of the world was still feeling the impact of a global economic crisis.
But surprisingly, the FIRS chairman, like a man with a gift of clairvoyancy had told the House of Representatives Committee on Finance at a public hearing on the 2022-2024 Medium Term Expenditure Framework (MTEF) and Fiscal Strategy Paper (FSP), sometime in August 2021, that the agency was projecting to collect tax revenue of over N10 trillion for 2022.
And that was exactly what happened with the 2022 Performance update showing an unprecedented figure of N4.09 trillion from the oil sector and N5.96 trillion from non-oil to bring the total collection for the year to N10.1 trillion.
So what were the factors responsible for the two back-to-back record collection feats?
A look at what Nami brought to the table after assuming office may provide some insight into what has been happening in the last 3 years.
He came into FIRS with a private sector background and, I dare say, mentality and immediately set out what he wanted to achieve in a four-point agenda: to rebuild the FIRS institutional framework; to improve collaboration with stakeholders; to make the FIRS a customer-centric institution and to make the agency a data-centric institution.
These were the pegs on which the historic feat could be hung especially as the reforms played major roles in breaching the N10 trillion revenue collection mark.
“The reforms introduced at different times from 2020 are gradually yielding fruits. By the close of 2022, the Service had fully restructured the administration of the Service for maximum efficiency and achieved internal cohesion such that all functional units are working in unison towards the achievement of set goals.
“As a result of conducive environment created for staff, officers of the Service are pulling their weight on the global stage with international recognitions and awards.
“The Service had also automated most of the administrative and operational processes. A major leap was the full deployment of the TaxPro Max for end-to-end administration of taxes in June 2021. The module for the automated TCC went live 1st January 2023 while taxpayers had already downloaded over 1,000 TCCs this year without having to visit FIRS office,” the report read.
It is interesting to note that the report also stated that the N10.1 trillion does not include tax waived on account of various tax incentives granted under different laws which according to FIRS amounted to N1,805,040,163,008.
This is certainly a huge figure that shows the possibility of the agency doing better not only in the 2023 financial year but also in coming ones.
In the midst of all these is the long standing vow by President Muhammadu Buhari to break Nigeria’s over reliance on oil and from all indications the FIRS management has keyed into it with its performance especially in the last two years.
This ongoing effort to wean the country from its over dependence on revenue from oil is a major reason why Nigeria did not suffer the full effect of the drop in global oil prices.
Today, the revenue projection for 2023 showed that 78% of total revenue is coming from the non-oil sector and of course the FIRS is bound to be a major contributor.
And this is visible from how the agency has shown, for two years running, that it has the necessary capacity to be the lead contributor to the good performance of the non-oil sector.
But more importantly is that FIRS has shown that it will be instrumental in any effort to address the country’s revenue challenge.
Mr. Dapo Okunbajo is a public affairs commentator and veteran journalist.
Why We Seek Inclusion In Conditional Cash Transfer –Obiora Oti
THE National Vice President of Mobile Money and Bank Association of Nigeria (MMBAN), Obiora Oti, said money wallet bankers would improve their capitalisation and liquidity if the government included them as facilitators in the conditional cash transfer scheme.
Oti told The ICIR exclusively on Wednesday, November 8, that many young people involved in the money wallet business could be supported with a seed capital of about N50,000 and become part of the Federal Government’s cash transfer scheme.
This development, he said, would ensure enough liquidity for them to stay in business since many of them have undergone financial inclusion training under the Central Bank of Nigeria (CBN) policy guidelines.
Oti recalled how he supported someone with seed money of N20,000 in 2020, during the COVID year, and how the person has become an aggregator and now manages N15,000,000 capital.
“This is how financial inclusion works, and it is one of the fastest ways of removing people from poverty,” he said.
“Typically, you don’t grow the gross domestic product (GDP) by throwing money to people through interventions. When there is a channel for such distribution, it stimulates the economy’s growth,” he added.
He also argued that empowering money wallet agents was a sure way of driving Nigeria’s financial inclusion and economic base.
According to Oti, Nigeria has many lessons from Kenya in its financial inclusion success story because of the Kenyan government’s involvement and facilitation through policy direction and incentives to operatives.
Agency banking allows customers to deposit and withdraw money instead of going to the bank or using automated teller machines (ATMs.)
Currently, there is one agency banking agent for every 80 Nigerians and one bank branch for every 27,000, according to a 2023 report on the Nigerian Financial Services Market.
Naira Falls To N1, 000/$ In Official Market
Despite recent moves by the Central Bank of Nigeria to strengthen the foreign exchange market, the naira closed trading on the Investor & Exporter forex window on Thursday at N996.75/$.
This is a 13.95 per cent decline from the N874.71/$ it closed trading on Wednesday. So far, the naira has lost 27.75 per cent of its value since opening the week at N780.23/$ according to details on FMDQ OTC Securities Exchange.
Since firming up against the dollar last week, after news that the apex bank was clearing some of its backlog broke, the naira has been on a steady decline in both the official and parallel markets.
So far, the naira has lost about 40 per cent of its value in 2023, earning the tag of one of the worst performing African currencies from the World Bank.
In the parallel market, the currency has lost value too, falling from N950/$ as of Friday to close to N1,140/$ as of Thursday according to Bureaux De Change operators who spoke to The PUNCH. This represents a 20 per cent decline.
A trader who only gave his name as Kadri said, “Dollar is N1,100 if you want to sell. It is N1,140 if you want to buy.” Another trader, Awolu, stated that he would buy the dollar at N1,100 from our correspondent.
He said, “Dollar is N1,100 if you want to sell to me.”
Earlier in the week, the President of the Association of Bureaux De Change Operators of Nigeria, Aminu Gwadabe, told The PUNCH that the dollar was gaining against the naira because people who had bought it at a higher price were resisting its fall.
He said, “Speculators are always looking at elements of sustainability. Once they sense that it (the injection) is not continuous, they begin to react. They begin to react. It is the reaction of the market we are witnessing. Also, there is resistance. There are people that bought at a higher price that this does not favour. People are not willing to take further losses.”
Concerned with the fall of the currency, the presidency recently stated that it is planning policies to strengthen the local currency.
A Special Adviser to the President on Economic Matters, Dr Tope Fasua, who was representing the Vice President, Kashim Shettima, at an event, said: “For those who are speculating and praying and wishing that the currency would become nonsense, I believe that the central bank is rolling out the policies and the government that I serve, led by the President, will shock some of them.”
Dangote Repatriates $688m From African Operations
Dangote Industries Limited has revealed that it has so far repatriated over $687.98m through various banks in Nigeria.
In a statement on Sunday, the company said it brought in $576,008,672.41 through various banks in Nigeria, in addition to a $111,968,109.38 cash swap arrangement between Dangote Cement Plc and Ethiopian Airlines.
Dangote re-affirmed its determination and belief in Nigeria, noting that the government of President Bola Ahmed Tinubu had shown the will and resolve to get the economy moving again.
“We are not body-shop investors. We believe in Nigeria, and we believe in Africa. We are genuine and authentic about our investments, and we call on all relevant agencies to investigate our FX transactions in the past 10 years and make public any infraction noticed or discovered.”
Insisting that all forex purchased in respect of its African Project Expansion were genuine and fully utilised for what they were meant for, the firm noted that the projects for which the forex was utilised were visible for everyone to see.
“It is on record that some of these projects were commissioned by Nigerian top-ranking government officials and in attendance were chief executives of various banks, captains of Industries, and the Presidents of the host countries supported by their Senior Government officials.
“The commissioning events of these projects were well documented and covered by both local and international media. There are also print and electronic copies of the commissioning ceremonies as further testimony to the judicious utilisation of the funds.”
Dangote further explained that its massive investments in Africa would lead to the repatriation of forex in the very near future and boost foreign exchange earnings in Nigeria, as well as stabilise the forex market.