Uche Usim, Abuja
The Federal Inland Revenue Service (FIRS) on Thursday announced it has set a new revenue collection record for the first quarter (Q1, 2020), describing it as the highest since its inception of the agency.
According to a statement released by the Service, total collections for the quarter rose 15 per cent compared to the Q1, 2019.
In the final computation of the Q1, 2020 results, a comparative analysis of the two periods shows that the Q1, 2020 collection of N1,203,310,372,900.34 is more than N156 billion higher than its corresponding Q1, 2019 collection of N1,046,889,787,060.27.
The Executive Chairman of FIRS, Mr Muhammad Nami, attributed the feat to widespread policy reforms and institutional re-organisation he initiated on assumption of office in December, 2019.
According to him, Q1 collection results have traditionally been notoriously low as a result of limited economic activities within the period, which business analysts trace to the festive hangover of the New Year celebrations, delay in budget presentation which was a New Year ritual in the country for decades under the Military, limited clarity about government policy directions after the budget had been presented and consumer spending cautions coupled with limited liquidity following lavish festivities of preceding December month and January 1 New Year celebrations.
He added that the historic final performance results for Q1, 2020 were all the more remarkable as the period coincided with two adverse global developments on individuals, businesses and nations – a global fall in the price of crude oil price and a shutdown of global economic system by the COVID-19 pandemic.
The Q1 result shows impressive 15 per cent rise in collection trends.
A breakdown of the collections show that Capital Gains Tax (CGT) recorded 568 per cent increase to N643,935,849.06, from N96,408,740.90, Gas Income Tax rose by 420per cent from N2,977,345,332.31 in Q1,2019 to N15,489,264,736.92 in Q1,2020 while Petroleum Income Tax (PPT) increased by 9per cent.
Other taxes such as Companies Income Tax (CIT) increased by 152 per cent – N102,610,369,777.73 in Q1, 2020 compared to N40,696,980,658.52 for the Q1, 2019; NITDEF rose by 522 per cent – Q1, 2020 N691,206,855.85 to N111,037,797.16 for the Q1, 2019; and Stamp Duty increased by 40 per cent from N3,386,648,663.85 in Q1, 2019 to N4,750,893,578.48 in Q1, 2020. Value Added Tax (VAT) increased by 27 per cent at the Customs Level and 13 per cent at the Non-Import Level.
The passage of Finance Act 2019 led to a drop in Withholding Tax rate from 5 per cent to 2.5 per cent in some sectors. The Act also tinkered with Pre-operational levy (levy paid by taxpayerstoobtain TCC) thereby resulting in a 5per cent collection in Q1, 2020, a drop from 7 per cent in Q1, 2019.
With the full take-over of PAYE and PIT in the FCT by FCT-IRS, the FIRS lost all FCT collection, which led to the fall in both Pay As You Earned (PAYE) and Personal Income Tax (PIT) for Q1, 2020.