Nigeria spent 96 percent of its revenue on debt servicing in 2022 - NEWS FRONTIER DAILY


Monday, September 18, 2023

Nigeria spent 96 percent of its revenue on debt servicing in 2022

The Chairman of the Federal Inland Revenue Service, Dr. Zacch Adedeji, has disclosed that the nation is in a revenue crisis and requires urgent steps to change the narrative

Receiving handover notes from his predecessor,  Muhammad Nami, in Abuja, Dr. Adedeji said that about 96 percent of the federal government revenue was spent on debt servicing, last year.

The situation, according to him  was not sustainable.

His words, "We are in revenue crisis. Government revenue is low amid a huge public debt. 

"Last year, 96 per cent of government revenue went into debt servicing. Where debt has grown bigger than the Gross Domestic Product (GDP) and debt servicing faster than revenue, immediate actions have to be taken to remedy the situation."

On his agenda to optimise revenue generation, Dr. Adedeji said, "In this direction therefore, we will key into the reforms being made by President Bola Tinubu who has since inaugurated a Presidential Fiscal Policy and Tax Reforms Committee.

 "The mandate of the Committee is to, among other things, evolve an effective design and implementation of fiscal policy and tax reforms for economic prosperity.

"At FIRS, we will embrace efforts being made to design a tidy fiscal landscape for the country and in the process address some of the obstacles impeding effective operations of the Service as the primary agency of government responsible for the administration, assessment, collection, accounting as well as enforcement of taxes and levies. 

"We need to innovate and build our operations on foolproof technology, while also evolving a hub of fresh ideas and creativity. "

The new tax master pledged to eliminate leakages in the system, with a view to raking in all tax revenues into government coffers.

According to him, "We must definitely plug leakages. We need to strengthen our internal processes and control mechanism. We must put a high premium on effective coordination of assigned tasks and delegated responsibilities."

He said that he would stimulate voluntary compliance among tax payers to fulfill their obligations,  as according to him,  his team would engage taskeholders and sensitise them on the need for voluntary compliance. 

His words, "Under me, we will not force things down the throat of our stakeholders. I will always be ready to engage with them, work with and through them to jointly build a tax administration that we will all be proud of and one that enjoys the trust and confidence of all. 

 "Broadly, we intend to come up with a menu of strategies that will stimulate voluntary payment of taxes and levies. 

"Yes, this is achievable because Nigerians acknowledge the need for government to increase its revenue to be able to meet its obligations to them.  In doing this, we will build a tax system that is smart and modern, one with unquestionable integrity and will earn the trust as well as admiration of stakeholders."

Dr. Adedeji charged management and staff to "work with uncompromising integrity, uphold taxpayers’ confidentiality, and demonstrate a high level of professionalism, fairness and show exemplary public service."

.....N8.5 trn already collected this yr- Nami

The outgone Chairman disclosed, however,  that the Service was on its to setting a new revenue record in 2023, having collected N8.5 as at the 14th of this month.

Mr. Nami added that within the period under review, his administration assessed,   and recovered another N4 trillion from the  igeriian National Petroleum Company Limited (NNPCL).

He said that he has surpassed his 10 percent Tax-to- GDP target of four years, having achieves 10.86 percent in two years.

He added that the 18 percent target in four years, set by the current administration was not only reusable but could be surpassed.

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