Chinelo Obogo

President Muhammadu Buhari, yesterday promised there will be ‘severe consequences’ if any of Nigeria’s revenue-generating agencies fails to meet its set targets.

The president issued the warning during his National Independence address on Tuesday morning at 7am.

Though Buhari did not single out any agency and wasn’t specific on his warning, many believe   he was mainly directing his statement to the Federal Inland Revenue Service (FIRS) whose boss, Babatunde Fowler, was recently queried by the Presidency for consitently under performing in his revenue collections between 2015 to 2018.

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.”

The president’s warning came weeks after the presidency issued a  query to the chief executive of the FIRS Babatunde Fowler, over worsening tax collection since 2015.

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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 its 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 demanded for some explanations from Fowler Before his appointment in 2015, the only year FIRS could not meet its collection target was 2006 from year 2000.

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

In his response, Fowler agreed that actual tax collections since the beginning of Buhari’s administration were 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 crisis which has seen a fall in commodity price compared to the period under Jonathan, and recession “which slowed down economic activities.”