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How TIN’ll transform tax collection in Nigeria

How TIN’ll transform tax collection in Nigeria

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The New National Taxpayer Identification Number (TIN) Registration System and Consolidated National Taxpayers Database has been adjudged the tonic needed by tax authorities to improve the efficiency and output of the entire tax administration process in the country.

According to Mr Babatunde Fowler, the Executive Chairman of Federal Inland Revenue Service (FIRS)/Chairman of Joint Tax Board (JTB), the system is designed in such a manner that each taxpayer is assigned a unique and universal Taxpayer Identification Number (T IN) which makes it possible for the taxpayer to view, retrieve or update his/her tax profile all day/everywhere Fowler was optimistic that the system would shoot up the nation’s tax base by more than 100 per cent during the third quarter of the year which ends this September.

“We are confident of this because the last four years have seen a number of modest milestones in tax-revenue administration”, he said.

Enumerating few of these milestones during the South West Regional flag-off of the TIN Registration System and Consolidated  National Taxpayers’ data base recently in Lagos, he stated: “Some of these include expansion of the tax base from 10 million to 20 million taxpayers with the potential for an increase of up to 45 million people before the end of the third quarter of 2019. The growth in the internally generated revenue (IGR) of states by 46.11 per cent  from N 800.02 billion in 2016 to N1.16 trillion in 2018.”

At the occasion, he equally shared his thoughts on some of the burning tax issus in the country.

Excerpts:

New TIN

On July 1,  the Vice President, Professor Yemi Osinbajo, officially flagged off the new national TIN registration system and consolidated national taxpayers database in the nation’s capital. The epoch-making event marked the official Go-Live of the New TIN Registration System at the national level.

The new System while improving the efficiency and output of the entire tax administration process, is meant to provide a variety of convenience to both the taxpayers and the tax administrator. It is pertinent to note that the new system guarantees that each taxpayer’s details are readily available to them at their fingertips all day/everywhere. Furthermore, the new system also possesses the capability to integrate with relevant agencies and leverage on already captured data, deploy analytics to discover underlying and correlating trends and patterns that could lead to better visibility and increased Internally Generated Revenue (IGR) for all tiers of government. This would significantly reduce the burden of manual taxpayer information management and, by extension, grossly crash the cost of collection.

The System is designed in such a manner that each taxpayer is assigned a unique and universal Taxpayer Identification Number (TIN) and it is now possible for any taxpayer to view, retrieve or update his/her tax profile from anywhere 24/7.

South-west collections

The fact of Lagos State being the economic nerve centre of the nation is not in dispute. Touted as the fifth largest economy in Africa, Lagos is home to the Apapa Port and the Tin-Can Port. It is also the hub of the nation’s aviation industry and the nerve centre of the nation’s manufacturing and financial sector, with thousands of manufacturing companies and hundreds of financial institutions having their operational headquarters within its boundaries. In simple terms, the economic profile of Lagos is humongous, and the effect of its economic activities can be felt across the entire South- West geo-political zone and the nation as a whole.

At 45.6 per cent, the South West geopolitical zone is the largest contributor to total IGR collection at the sub-national level for the year 2018. This is a trend that has been consistent over the years, and with the vibrancy of economic and commercial activity in the zone, it holds immense potential which can only be unlocked by a systematic approach to revenue generation.

For a state like Lagos State, which has continued to carve a positive niche for itself in terms of innovation and dynamism in tax administration, and for neighboring states within the region that are towing similar paths of tax reform, the new system can only but consolidate the efficiency and effectiveness of the tax administration process.

Partnership

This new reality, that the new system can consolidate the efficiency and effectiveness of the tax administration process, drives the desire by the JTB to ensure that the identification of individuals and corporate bodies for tax purposes in Nigeria is achievable. It is not only important that these records are available, it is equally important that the records are credible and reliable and that they are accessible under a secure environment, online real-time.

My deep appreciation goes to our partners and collaborating agencies;Corporate Affairs Commission (CAC), Nigeria Customs Service (NCS), Nigeria Immigration Service (NIS), Federal Road Safety Commission (FRSC), Central Bank of Nigeria (CBN) and the Nigeria Inter-Bank Settlement System (NIBSS), Nigeria Identity Management Commission (NIMC), Nigerian Communications Commission (NCC), as well as our consultants for their cooperation and professionalism leading to the reality of today’s event. While we are await the relevant data from the Central Bank of Nigeria (CBN) via the Nigeria Inter-Bank Settlement System (NIBBS), and the National Identity Management Commission (NIMC) as directed by the Presidency, we believe that today’s ceremony will further reinforce the need for us to work together as one to promote the ease of doing business and the Economic and Recovery Growth Plan (ERGP)of Mr. President.

Scorecard

We believe that the new system will reinforce the laudable efforts of this administration towards building a robust tax-revenue administration system, promoting a tax friendly environment and ensuring a sustainable and inclusive economy for all Nigerians.

We are confident of this because the last four years have seen a number of modest milestones in tax-revenue administration some of which include: The expansion of the tax base from 10 million to 20 million taxpayers with the potential for an increase of up to 45 million before the end of the third quarter of 2019;  the growth in the IGR of states by 46.11 per cent from N800.02 billion in 2016 to N1.16 trillion in 2018; the growth in FIRS collections by 53.81 per cent from N3.30 trillion in 2016 to N5.32 trillion in 2018; with the 2018 total collection of N5.32 trillion being the highest collection ever in the history of FIRS, while Non-Oil Revenue, with a collection of N2.85 trillion accounted for 54 per cent of the total revenue collection; the payment by the Federal Government of all outstanding Pay As You Earn (PAYE) tax liabilities owed by Federal Ministries, Departments and Agencies (MDAs) to states from 2002 to 2016, totalling N135.8 billion; with a total of N33.13 billion paid to the states in the South-West geopolitical zone. We hope that this gesture will encourage state governments to also promptly remit all Withholding Taxes (WHT) and Value Added Tax (VAT) due to the Federation Account;

Ease of doing business

There was a positive movement during the same period when Nigeria moved up by 25 points in the Tax Administration Section of World Bank ‘Ease of Doing Business’. it is expected that the country would further move up the rankings by the time the review for 2019 is published.

Today’s event has brought together stakeholders from diverse sectors and segments of the South-West geopolitical zone all with one desire, to drive the financial and economic regeneration of the region in particular and Nigeria in general into one that is viable, sustainable and inclusive. We are pleased to state that the new National TIN registration system strongly tie in with this desire and together, we shall be laying a strong foundation to ensure adequate funding for government at all tiers beyond aid, grants and borrowing.

At this juncture, we would like to acknowledge the positive role played by all our partners and stakeholders towards making this flag-off event a reality. Most especially, our immense gratitude goes to, the governors of the states in the South-West geopolitical zone for the exceptional attention their administrations are paying to growing the nation’s economy, and to all tax related matters in particular. They can rest assured that when the history of the nation’s economic transformation is being written, their names will be written in gold.

 

 

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