Zacch Adedeji, the Executive Chairman of the Federal Inland Revenue Service (FIRS), recently rallied state accountant-generals in Nigeria to amplify their efforts in boosting internally generated revenue (IGR). Speaking at a workshop focused on enhancing tax compliance and revenue generation in Abuja, he underscored the integral role that state financial officers play in fulfilling Nigeria’s revenue collection ambitions. Adedeji’s message was clear: the FIRS, as the primary body responsible for tax collection, cannot operate efficiently without the cooperation and support of state accountants, who are essential in driving compliance and remittance within their jurisdictions.
In addressing the nation’s pressing economic challenges, Adedeji highlighted the urgent need for the Nigerian government to optimize its IGR while avoiding increased tax rates. He emphasized that the collective goal of all government officers should be to enhance revenue collection for the nation’s development while improving the welfare of Nigerian citizens. He explained that this can be achieved without resorting to raising tax rates; rather, the focus should be on identifying and blocking revenue leakages and ensuring strict adherence to existing tax laws. This collaborative approach is seen as vital to fostering a healthier economic environment and improving the fiscal landscape of the country.
To bolster revenue generation, Adedeji called for joint efforts in enforcing the remittance of various taxes, including Value Added Tax (VAT), Stamp Duties, and Withholding Tax (WHT). He acknowledged that the government has undertaken several initiatives to streamline tax collection processes, with particular attention to the recently implemented centralized payment system. This system enables state accountant-generals to make tax payments for government agencies, thus promoting efficiency and timely remittance of taxes. It is a crucial step in addressing the bureaucratic challenges that often hinder effective tax remittance.
Adedeji further explained the rationale behind the recent reduction in WHT rates, clarifying that it was intended to alleviate the financial burden on businesses rather than hinder tax revenue. By shifting the focus from taxing revenue to taxing profits, the government aims to support business growth while enhancing compliance. He noted that while this reduction might initially lead to a dip in tax collections, the expectation is that improved compliance rates and a broader tax base would eventually compensate for this shortfall.
Technological advancements have also been a focal point in the FIRS strategy to enhance tax compliance. Adedeji outlined the various initiatives that have been adopted to improve tax processes, aiming to create a seamless interaction between tax authorities and taxpayers. The FIRS is optimistic about its ambitious target of achieving an 18 percent tax-to-GDP ratio by 2026. This target is seen as essential for driving economic growth, ensuring fiscal sustainability, and creating an environment conducive to investment.
In conclusion, Zacch Adedeji’s call to action reinforces the importance of collaborative efforts between state and federal agencies in enhancing Nigeria’s revenue system. By optimizing IGR, enforcing compliance, utilizing technology, and fostering a cooperative spirit among financial officers, the FIRS aims to navigate the challenges posed by the current economic landscape. This comprehensive strategy is crucial for not only alleviating financial strains on the government but also for paving the way toward sustainable and inclusive growth for all Nigerians.
