Chinelo Obogo

President Muhammadu Buhari has said that there will be ‘severe consequences’ should any of Nigeria’s revenue-generating agencies fail to meet set targets.

The President made this known during his National Independence address Tuesday morning.

Though he did not single out any agency and wasn’t specific, many infered that the President was mainly directing his statement to the Federal Inland Revenue Service (FIRS).

Mr Buhari said: “Our revenue-generating and reporting agencies will come under much greater scrutiny going forward, as the new performance management framework will reward exceptional revenue performance, while severe consequences will attend failures to achieve agreed revenue targets.”

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The President’s warning comes weeks after the Presidency issued a query to the Chief Executive of the FIRS, Babatunde Fowler, over the worsening state of tax collection since 2015.

In the query dated August 8, the Chief of Staff to the President, Abba Kyari, said the Presidency “observed significant variances between the budgeted collections and actual collections for the period 2015 to 2018.”

Kyari observed that the FIRS in 2015 set a N4.7 trillion revenue target but was only able to make N3.7 trillion in the actual collection. In 2016, 2017 and 2018, the target collections were N4.2 trillion, N4.8 trillion and N6.7 trillion but the actual collections were N3.3 trillion, N4.0 trillion and N5.3 trillion, respectively. Worried by the variances, Kyari asked Fowler for an explanation.

Before Fowler was appointed in 2015, the only year FIRS could not meet its collection target since 2000 was 2006.

Kyari stated: “Accordingly, you are kindly invited to submit a comprehensive variance analysis explaining the reasons for the variances between the budgeted collections and actual collections for each main tax item for each of the years 2015 to 2018.”

Related: Presidency queries Fowler over drop in tax collections

In his response, Fowler agreed that actual tax collection since the beginning of the Buhari administration was lower than the 2012-2014 period under former President Goodluck Jonathan, in general terms. But he said that FIRS under him has performed better regarding specific non-oil tax types, such as VAT and CIT.

He, then, associated the general lower collection since 2015 to oil market crises which have seen a fall in commodity prices compared to the period under Jonathan, and the recession “which slowed down economic activities.”

Since Mr Fowler’s response to the query in August, the Presidency has not issued any further public statement. Mr Fowler is set to complete his term at the head of the revenue service or earn a tenure renewal.

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