According to the Federal Inland Revenue Service, the establishment of a Road Infrastructure Tax in Nigeria is being considered to encourage the informal sector to contribute to the development of modern society.
Muhammad Nami, the Executive Chairman of FIRS, announced while receiving a team from the Nigeria Union of Journalists, led by its National President, Chris Isiguzo, in his Abuja office on Thursday.
According to Nami, the planned Road Infrastructure Tax, which will be handled by FIRS, will provide appropriate funds for road development, repair, and maintenance, as well as provide the country’s highways with the necessary security.
He said, “One quick and very important intervention required of you is in the area of the Road Infrastructure Funding Scheme that the country needs in order fix our roads and bring the informal sector to the tax net”.
In many jurisdictions, road users pay for use of road infrastructure, adding that this should not be viewed as a burden on the people since it has the potential to enhance their quality of life.
Nami went on to say that Nigeria’s economy is currently reliant on non-oil earnings to meet its statutory obligations of paying salaries and delivering social services to its citizens.
“Without the tax that you pay, governments at all levels would not be able to fulfil their mandate to the electorates. Tax money also helps to ensure the roads you travel are safe and always in good condition,” he said.
He revealed that the recent increase in the price of crude oil should have had a positive influence on the Petroleum Profit Tax paid by oil businesses. However, due to a variety of factors, it has demonstrated otherwise.
“Crude oil output has been curtailed by OPEC quotas,” he added of the problems the service has in fulfilling its purpose. Nigeria’s OPEC quota was at 1.5 million barrels per day in July 2021, compared to a crude oil production budget of 1.8 million barrels per day”.
“This is a shortfall of 300,000 barrels per day. Our average daily crude oil production is around 1.250mbpd as against the allocated 1.5mbpd OPEC quota which has resulted in a shortfall of almost 250,000 barrels per day mainly caused by crude oil theft and force majeure declared by some of the IOCs.
“The total shortfall to FGN budgeted production is about 550,000 barrels per day.
“Huge losses brought forward and un-recouped capital allowances reported by most of the companies due to production shut-in and the fall in oil price in 2020 as a result of the covid-19 pandemic which reduced their revenue”.
In light of the oil and gas sector’s issues, he said, the agency has implemented measures that have a tangible impact on the economy, such as the use of technology in tax administration to increase domestic revenue mobilization in the face of falling oil prices.
Nami went on to say that the service established ten Value Added Tax (VAT) Regional Coordination Offices across the country to help with VAT collection.
He said, “We have commenced the usage of VAT Form 002A for enrolment and tracking of branch offices of major VAT payers. This will certainly improve our VAT collection and capacity. We achieved 114.66 per cent of our VAT collection target in the first half of the year”.
“It will interest you to know that the Service collected a total of N4.2trn between January to September 2021. This feat was achieved as a result of the efficiency and effectiveness of the TaxProMax Solution and intelligence/data we gathered, mined and analyzed in the period under review”.
“The service successfully facilitated both the mock and external audits for the ISO 27001:2013 certification of the Exchange of Information centre, to meet international information security management standards”.
President of the NUJ stated that the union’s visit is part of his commitment to engaging critical institutions as key stakeholders in charting a path forward for the country’s collective good.