Fowler replies query, enlightens Kyari on tax collection indices

Executive Chairman, Federal Inland Revenue Service, Babatunde Fowler, has explained why actual tax collection since the beginning of President Muhammadu Buhari’s administration was lower than the 2012-2014 under former President Goodluck Jonathan.

He disclosed this in his reply to a query issued by the President’s Chief of Staff, Abba Kyari on the discrepancies in tax collection receipts.

The query, titled: “RE: Budgeted FIRS Collections and actual collections” reads: “Your attached letter (FIRS/EC/ECW/0249/19/027 dated 26 July 2019) on the above subject matter refers.

“We observed significant variances between the budgeted collections and actual collections for the period 2015 to 2018. Accordingly, you are kindly invited to submit a comprehensive variance analysis explaining the reasons for the variances between budgeted and actual collections for each main tax item for each of the years 2015 to 2018.”

In his reply on Monday, Fowler associated the lower collection since 2015 to oil market crisis which has seen a fall in commodity price compared to the period under Mr. Jonathan, and recession “which slowed down economic activities.”

In the reply made available to National Daily, Fowler said: “Your letter stated that actual collections for a 3-year period were significantly worse than what was collected between 2012 and 2014. Total actual collection for the said period was N14, 527.85 trillion, while total actual collection between 2016 and 2018 was N12, 656.30 trillion.”

According to Fowler, out of the N14, 527.85trn collected between 2012 and 2014, oil revenue accounted for N8, 3321.64trn while non-oil accounted for N6, 206.22trn or 47%. Unlike the amount collected between 2016 and 2018 when oil revenue accounted for N5, 145.87trn while non-oil revenue collection figures accounted for N7, 510.42trn.

Non-oil revenue under the present management of FIRS grew by N1, 304.24trn or 21% within the period 2016 to 2018. Kindly note that the total budget collection figure during 2012 to 2014 stood at N12, 190.52trn compared to N16, 771.78trn for the period 2016 to 2018, which represents an increase of 37.58%,” he explained.

He explained that FIRS under him had performed better regarding specific non-oil tax types, such as VAT and CIT.

Meanwhile, the presidency has insisted Fowler was not under probe.

Presidential spokesman, Garba Shehu, in a statement said: “The letter from the Chief of Staff to the President, Abba Kyari, on which the purported rumour of an investigation is based, merely raises concerns over the negative run of the tax revenue collection in recent times.

“Consequently, it would appear that the country might be heading for a fiscal crisis if urgent steps are not taken to halt the negative trends in target setting and target realisation in tax revenue,” Garba said.