2017 Fiscal year: FIRS targets N1.8trn in Value Added Tax
The Federal Inland Revenue Service (FIRS) has disclosed that it is targetting a N1.8 trillion Value Added Tax (VAT) collection for the 2017 fiscal year.
This is to increase tax collection and reduce over-dependency on oil revenue.
It said VAT is expected to grow from N828 billion to N1.8 trillion which is over 125 percent increase.
The executive chairman of FIRS, Tunde Fowler revealed this while presenting the 2017 budget of the Service to the Senate Committee On Finance.
Fowler told the committee that the achievement of the 2017 budget will be driven by VAT collection using some critical sectors and financial institutions. He put tax collection between January to June 2017 at N1,782,922, 600.000 with variation of N224,140,900,000 giving 14 per cent increase of the same period in 2016.
He said the Service has proposed to reach the target as derived from federal government’s 2016-2018 Medium Term Revenue Framework (MTRF) for 2017 amounting to a total of N4.89 trillion.
On budget parameter, the FIRS boss said the 2017 projected cost of collection of N153.44 billion is higher than the 2016 approval estimate which stood at N143.90 billion.
He also said the figure represented a cost of collection increase of 6.63 percent on overall projected non-oil revenue including VAT, stamp duties and levy.
On the revenue projections performance for the period January to June 2017, the FIRS boss said the analysis showed that the Service recorded an increase of N224 billion representing an overall increase of 14 per cent in 2017, when compared with the collection performance for the corresponding period in 2016.
“The Service in realization of this responsibility and challenges of doing manual collection, has automated VAT collection for the critical sectors of the economy notably telecommunications, airlines and financial institutions.
“The budget for oil revenue dropped by 9 per cent over 2016 actual due to low oil price that operated in the year. The surplus budget of N848 arising from expected total revenue of N153.4 billion over expenditure of N152.6 billion.
We have therefore achieved 72.93 per cent of our half year target of N2.44 trillion for 2017 as against 74.2 per cent of N2.1 trillion for the corresponding period in 2016.
“The chairman may note that we attained this collection performance despite several challenges, as we have continued to vigorously pursued our strategies internally while improving collaboration with relevant stakeholders to boost our collections.
“The strategies put in place are on course and progressively yielding fruits. We are hopeful therefore that the efforts being made will translate to significant tax yields before the end of 2017,” he added.
Fowler further urged the Senate to approve “the surplus budget of N848 billion arising from expected total revenue of N153.4 billion over expenditure of N152.6 billion.”