The Federal Inland Revenue Service (FIRS) has projected N1.8 trillion Value Added Tax (VAT) collection for 2017 fiscal year.
The projectuon was made by the Executive Chairman of the revenue collecting agency, Tunde Fowler in his 2017 budget defence presentation to the Senate Committee on Finance on Tuesday.
The FIRS boss told the committee that the budget focused on capacity to increase VAT and other non-oil revenue.
He noted that principally, VAT is expected to grow from N828 billion to a budget of N1.8 trillion which is over 125 percent increase.
He also told the committee that the achievement of 2017 projection will be driven by VAT collection.
“The Service in realization of this responsibility and challenges of doing manual collection, have automated VAT collection for the critical sectors of the economy notably telecommunications, airlines and financial institutions,” he said.
Fowler said that the deployment of the platforms is at no cost to the Service while the consultants will only be rewarded on incremental revenue generated.
He told the Committee that the Service proposed to collect the following tax revenue target as derived from Federal Government 2016-2018 Medium Term Revenue Framework (MTRF) for 2017 amounting to a total of N4.89 trillion.
Fowler said that the budget for oil revenue dropped by 9 percent in 2016 due to low oil price in the international market.
On budget parameter, the FIRS boss said that the 2017 projected cost of collection of N153.44 billion is higher than the 2016 approval estimate which stood at N143.90 billion.
The figure, he said, represents a cost of collection increase of 6.63 percent on overall projected non-oil revenue including VAT, stamp duties and levy.
Fowler prayed the Senate to approve “the surplus budget of N848 arising from an expected total revenue of N153.4 billion over expenditure of N152.6 billion.”
On the revenue projections performance for the period January to June 2017, the FIRS boss said that the analysis showed that the Service have recorded an increase of N224 billion representing an overall increase of 14 percent in 2017, when compared with the collection performance for the corresponding period in 2016.
“We have therefore achieved 72.93 percent of our half year target of N2.44 trillion for 2017 as against 74.2 per cent of N2.1 trillion for the corresponding period in 2016.
He put tax collection between January to June 2017 at N1,782,922,600 representing 14 percent increase of the same period in 2016.
He said, “The chairman may note that we attained this collection performance despite several challenges, as we have continued to vigorously pursued our strategies internally wile improving collaboration with relevant stakeholders to boost our collections.
“The strategies put in place are on course and progressively yielding fruits. We are hopeful therefore that the efforts being made will translate to significant tax yields before the end of 2017.”
Chairman Senate Committee on Finance, John Enoh, stressed the need for the FIRS to work to achieve approved target.
Enoh noted that with a deficit of over N2 trillion, if the Service failed to meet its target, it would impact negatively on the implementation of the 2017 budget.
OWEDE AGBAJILEKE, Abuja