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External Forces In Oil Revenues Affected Tax Income – Fowler




The Chief Executive Officer of the Federal Inland Revenue Service (FIRS), Babatunde Fowler has replied a query by the Chief of Staff seeking explanations for the decline in tax revenues.

The Presidency, in a letter dated August 8th, and signed by Kyari questioned Fowler on the progressive decline in revenues from tax collections.

In the letter, Kyari said the revenues gotten between 2012-2014 is much more than that which the federal government has recorded between 2016-2018.

Fowler, in a detailed response elaborated expansively on reasons the decline is seen. He said there is a lesser dependence on oil-based revenues in comparison with what was obtainable in the years compared. He explained that the FIRS has worked to increase the revenues from non-oil industries, which the FIRS has better control over as oil-based revenues go through external forces.

In a reply letter seen by ALEDEH, the former LIRS boss said while total actual collection was N14.5trn between 2012-2014, it fell to N12.7trn between 2016-2018. He explained that between the initial period, 2012-2014, collections from oil was set at N8.3trn, representing 57.28% of the total while non oil was N6.2trn representing 42.72% of the total actual collection within the period.

Between 2016-2018, there was less dependence on oil, hence lesser revenues from the industry, largely considered Nigeria’s engine room. In the said period, oil revenues stood at N5.1trn if a total actual collection of N12.6trn while non-oil revenues stood at N7.1trn, which represented 59.35% of total collection. The oil revenue represented 40.65% of the total. This is an indication of the work the FIRS management has done to reduce the dependence on oil and help foster the growth of other industries, Fowler explained in the letter.

He said the non oil collection grew by 21% at the said period.


He further elucidated that the total budget collection within the said periods however does not indicate a laxity in the activities of the FIRS as the collection from total budget between 2016-2018 is greater than that between 2012-2014.

The total budget collection between the earlier period was N12.2trn while that recorded during Buhari’s government is N16.8trn.

Fowler, explaining further said the efforts of the FIRS in VAT has ensured that tax returns from VAT has increased by 40% between 2015-2017.

VAT collected between 2012-2014 stood at N802bn while that collected between 2016-2018 was N1.1trn. The inland revenue boss said the two targets laid down by government in increasing non-oil returns through VAT and CIT were increased between in 2018.

Recall that the FG looked towards revenues from non oil-based industries, as recession ate deep into the nation’s coffers. This was at the behest of dwindling oil prices in the international market, hence the urgency of the need then, to create a viable stream of income that depended less on petroleum

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