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  • Business - Economy
  • Updated: December 07, 2021

FIRS To Capture Federal MDAs, Others’ In New Tax To GDP Calculation

FIRS To Capture Federal MDAs, Others’ In New Tax To GDP Ca

The management of the Federal Inland Revenue Service (FIRS) has concluded plans to introduce its new tax capturing program to accommodate all Ministries, Departments, and Agencies (MDA) that generate revenue for the government in its tax collection bracket.

The agency noted that the current programme gave much room for revenue leakages as the tax to gross domestic product (GDP) ratio wasn’t reflective enough of the true position of things.

According to the Executive Chairman of the FIRS, Mohammed Nami,

All revenue earned or lost from all tiers of government and their ministries, departments, and agencies (MDAs) will now form part of Nigeria’s tax to gross domestic product (GDP) ratio.

The agency is worried that the approach the country has been using in the past to arrive at the tax-to-GDP ratio is inaccurate and doesn't provide enough equity and probity in tax administration. 

He made this disclosure in Abuja yesterday at a symposium on Taxation and the Challenges of External Shocks: Lessons and Policy Options for Nigeria and the launch of the FIRS Contact Centre.

With the contact centre now fully operational, taxpayers can seek assistance with enquiries, complaints, challenges, technical questions, follow-up and feedback through dedicated FIRS channels.

It is believed that with this innovation, the FIRS will encourage transparency, accountability, and effective management in the delivery of the government’s capital projects nation-wide. The Budget and National Planning arm of the Ministry of Finance is working on a Web App, the EYE MARK, that will assist citizens to "eye mark" and report on the government’s projects and programmes "earmarked" for their communities.

To ensure that all government revenue is included in the fiscal accounts and annual statistics, FIRS will, through the Ministry of Finance, Budget, and National Planning, ensure that all government revenue is included in the accounting for taxes generated. Nami emphasized even more.

Also, cash invested by taxpayers in road infrastructure as a result of Executive Order 007, tax waivers granted pioneer companies, import and exercise duties waived through the operations of the Nigeria Customs and all other revenues generated by MDAs on behalf of the federal, state and local governments in Nigeria will now form part of the tax to GDP ratio calculation.

"Inasmuch as the country needs to continually and conscientiously put measures in place to improve such a concern, there is also a need to comprehensively bring all the national and sub-national revenue sources into consideration to properly and appropriately determine the correct and meaningful tax-to-GDP ratio for the country. "He concluded.

We believe that with this restructuring, the tax base and tax revenue should increase exponentially to the benefit of the government's economic growth and development objectives.

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