LIRS Garners N25bn Revenue In December, Targets N50bn Monthly By 2018

LIRS Garners N25bn Revenue In December, Targets N50bn Monthly By 2018

The Lagos Inland Revenue Service (LIRS), on Wednesday said it raked N25 billion into the stake government’s coffers in December 2016, despite the economic recession in the country and the general slowdown of economic activities associated with year-ends.

Buoyed by such feat, Executive Chairman of LIRS, Mr. Ayodele Subair said it is targeting N30 billion revenue this and the subsequent months of 2017, and that in view of the ambition of the Governor Akinwunmi Ambode administration to present a N1 trillion budget for next year, the LIRS has also set a N50 billion monthly revenue target.

Subair, who was speaking during the Annual Tax Week 2017 organised by the Lagos District Society of the Chartered Institute of Taxation of Nigeria (LDS-CITN) with the theme “Economic Recession: Taxation as a survival roadmap,” admitted that though the task is daunting, it is doable and requires thinking outside of the box.

On funding of the 2017 spending plan of Lagos, he said “with the budget of about N813 billion, the LIRS is looking at leveraging on technology and improved automation of its services and (that the state government is) investing a lot in this direction.”

Describing the N25 billion earnings in December as a miracle, he said going forward, the service is working on integrating databases of all government agencies to ensure that the right questions are being asked at all times, just as proper trails are being followed.  

For example, he continued, the LIRS will integrate its processes with the Land Bureau for land use charge to enhance collection of appropriate revenue, just as there are plans to “encourage whistleblowing for information.”

Another move that is expected to boost revenue is the Bank Verification Numbering (BVN) that will help track as many transactions as possible.

He urged Nigerians to keep proper records, make true declaration and pay the appropriate taxes at all times, just as he appealed for voluntary compliance from all to enable government perform its responsibilities.

“LIRS is ensuring collaboration within various government ministries to pool together a huge database that will enhance revenue collection,” he added, noting that the ongoing recession and particularly the drop in oil price is a blessing in disguise, as it has forced governments to think about boosting internally generated revenue which has for years been abandoned in favour of oil money.

In a presentation titled: “Recession impact on state budgets- taxation as a mitigant, Mr. Abayomi Olugbenro Partner, Tax & Regulatory Services at Deloitte Nigeria, Lagos, warned that the troubling operating environment would reflect in the revenue of state governments and the Value Added Tax (VAT), such that their inability to meet recurrent obligations may continue, at a time the Federation Account Allocation Committee inflow is at its ebb and IGR is nearly non-existent.

As a way out, he called for a restructuring of the federation, to ensure states collect revenues available within their domain and make contributions to running the centre, a reverse of the current trend, just as the Nigeria must begin to see itself as a non-oil producing nation and become more prudent.

Olugbenro frowned at the situation in the 2017 budget where oil is still expected to contribute 40% of projected revenue, at a time when U.S. which produces more crude than so many countries does not see itself as an oil producing nation.

He urged state governments to expand the tax net, rather than increasing rates as such would be suicidal.

“If we don’t increase the tax net, it may impede national recovery,” he added, calling rather for a reduction in tax rate to allow for more disposable income in the hands of Nigerians, thereby boosting spending, and in the process growing VAT revenue whose impact would more than compensate for the reduced tax rate.

Rather than raising rates, he also suggested that government could focus on VIPs (Very Important Personalities) and non-government organisations (NGOs), particularly their associated individuals and vendors, as they are not tax exempt but are oftentimes overlooked.

Discussing the presentation, Mrs. Titilayo Fowokan, urged government to look into the area of luxury goods/lifestyle tax, urging that the proposed tax amnesty should be in good faith and should not be used as a bait, just as there should be a lot of enlightenment around it.

She also called for plugging of existing leakages in the tax system, just as government should mine available data to identify previously overlooked but possible sources of tax.

“Let’s make the tax environment very conducive and states would achieve their aims,” she urged.