The tax reform bills recently sent to the National Assembly by President Bola Ahmed Tinubu, GCFR, have generated controversies over the past weeks. Many commentators have expressed their views in support of the bills or against some of their provisions. The Northern Region has expressed vehement objection to the bills. They are against the bills because, in their views, the bills are entirely or partly anti-north. Given most of the observations and the pros and cons of the arguments advanced by the various commentators, it is pertinent to say that whatever views are advanced by the Northern stakeholders, the truth that must be told is that Northern Nigeria must yield itself to the full extent of modernisation, anyhow and soonest. The tax bills will invariably switch a region like the North out of its encrusted traditional and provincial life patterns.

There is no need to regurgitate the controversial issues around the tax reform bills as they are already in the public domain, and much has been said about them thus far. However, three keywords about the VAT derivation model proposed in the tax bills should form the cornerstone of deliberations and whatever decisions may be taken afterwards by the Northern stakeholders. These signature words are production, consumption, and competition.

The Value Added Tax (VAT) is described as a consumption tax. However, before consumption occurs, there must be production, whether in goods or services. Therefore, production is a key factor in any consideration or discussion of the Value Added Tax. Our rudimentary economic class tells us that factors of production are land, capital, labour, and entrepreneurship, which are the building blocks of any economy. Any society that desires economic progress will not take these factors of production for granted. Without mincing words, these production factors are abundant in Northern Nigeria, almost to the point of waste. One would expect that the North will have no issue with production, which invariably gives rise to consumption.

As an output of the production process, consumption depends on the purchasing parity of a people and their cultural tastes. Nonetheless, consumption can happen away from the point where goods and services are produced. It is expected, however, that both production and consumption can occur at the same place, thereby enriching the economy of that particular place. This is because trading and commerce will enhance people’s purchasing parity. Without mincing words, Northern Nigeria is essentially a consumption society but with the potential to be a producing economy. It must embrace progressive ideas and modernisation to harness its full economic potential.

This is where competition comes in. There is competition in every aspect of our lives, from the products and services being churned out daily to how societies employ strategies to grow their economies. This makes every society think progressively and forecast the future. No society lays back or indulges in wastefulness or a careless lifestyle and expects to be at par with other societies that have moved on the fast pedestal of development.

The pertinent question to ask at this juncture is why Lagos has suddenly become the envy of the entire nineteen northern states. What does Lagos state have that all northern states do not have or cannot have? The answer to the second question is that Lagos state has painstakingly embraced the full extent of modernisation through its deliberate policy planning and execution, it has embraced technology, industrialisation, financial inclusiveness and wealth creation strategies. Northerners are among those who made Lagos State what it is today with their massive investment there.

The point being emphasised here is that the VAT derivation formula being proposed by the tax bills should also be seen as a wake-up call for the Northern stakeholders and political establishment to stir the region out of its slumber and decipher these salient issues dredged up by the bills and quickly embrace the imperative of modernisation. Modernisation does not mean only the erection of skyscrapers, the construction of flyovers, or paved motorways. Suppose we have all these, by all means, okay. In other words, modernisation refers to a reformation of habits, which W. H. Auden refers to as a ‘change of heart’, which is not simple. In this regard, modernisation ‘is the reshaping and resharing social values, such as power, respect, rectitudes, affection, well-being skill, and enlightenment’. This is to say that the Northern leadership and political establishment must change its old ways of engaging with the people and the society. It must change its way of perceiving reality to begin to understand that leadership is an instrument for improving the conditions of a people, not a tool for manipulating them. It must wake up to an understanding that modern life is about competition, progress, and overcoming challenges that improve the condition of a people. It’s not about rhetoric and hyperbole.

Therefore, the North must shift away from the traditional way of doing business and tax collection to a more financially inclusive way to benefit from the VAT windfall.

The Northern political establishment must develop a mindset that comprehends the reality that governance is about service to the people, building capacities, developing human resources, bettering the living conditions of a people, and challenging the environment to yield its potential for the growth of the society. Indeed, governance should not be approached as a private fiefdom, a personal estate for a wilful distribution of privileges and patronage. For too long, the Northern political establishment has held down its people in poverty to authenticate its affluence and influence, thereby closing the space for more engaging and productive ideas and wealth creation. That’s why the political class would instead purchase bicycles, coffins, grains, wheelbarrows, and other mundane items purportedly as empowerment when politicians from different regions build their people on ICT and technology pedestals and build food security hubs and other progressive ideas.

The change of attitude required of the Northern political establishment should be the type that will lead to an organisation of economic activities, automation of business transactions, creative development of natural resources, and development of human resources through restructuring of education system and manpower training. W. W. Rostow states that for a society to sustain economic growth by its autonomous operations, ‘it must be effectively geared to the skills and values of the people who make it work’. That is to say that people’s entrepreneurial skills and values of hard work, industry, and resilience must be sharpened and attuned to the demands of modern life. Small and medium enterprises abound in the North. Still, they require uplifting through capital incentives like access to interest-free loans and other grants and enabling environment such as electricity, potable water supply, access roads to agricultural belts, etc. For example, through loans and grants, business owners can be encouraged to develop a value chain in their business lines and offer jobs to unemployed youth.

On automation, it’s essential that state governments in the North also recognise the role of technology in business transactions. Globally, technology is being used to drive revenue collection. Today, the record-breaking revenue collected by the FIRS is made possible because of the massive investment in technology allied with administrative finesse. Therefore, automation of tax payment processes is the norm everywhere. Automation can be done right from the point of business registration, where the data of a business owner can be collected and included in the financial or fiscal process.

READ ALSO: Tinubu arrives Lagos for Christmas, New Year holidays

Most importantly, this automation option becomes more compelling with the proposed derivation method of sharing VAT. In terms of consumption, it’s unarguable that soft drinks like 7UP, Fanta, Coca-Cola, Mirinda, Sprite, etc, are widely consumed in the remotest part of the North.   In the North, soft drinks equate to the liquor in the South. To be able to appropriate VAT from these drinks and other goods like indomine, pasta, sugar, cement, etc, an automation process needs to be implemented to track how VAT is charged at the wholesale distribution point. This is what is referred to as the output VAT.

Regarding the input VAT, deliberate policy can be made to create a value chain in producing and processing products like rice, yams, vegetables, and fruits. In other words, instead of selling the products in their raw forms, state governments should encourage investors to set up factories to create value chains necessary for generating the required revenue. Given its large population, the North can gain more from the consumption-based VAT method if a deliberate strategy is implemented to optimise the process of output VAT.

There is nowhere in the proposed VAT law explicitly stating that the 60% proposed is entirely and exclusively for Lagos state. The presumption that the VAT proposal will favour only Lagos state is just a figment of the imagination of those peddling the sentiment, which stems from a feeling of inadequacy. The clause says, ‘wherever the consumption of goods and services takes place’ will be given the percentage of the VAT it generates from the earmarked 60% of the overall monthly VAT volume generated. So, the onus on every state and region is to put its act together to track and authenticate the VAT it generates. Instead of lamenting or expressing the sentiment about Lagos getting the large share of the VAT, it behoves the North to look inward to harness its potential and organise its economic activities. Northern states must wake up to the challenge and stop the lamentations. The North has a population; it has all the factors of production, and it is equally endowed with natural resources to be ahead of other regions. So, why the panic?

Talking about natural resources, there is a concentration of mineral resources in the North like lithium, uranium, talc, limestone, gold, and even black gold and a host of others to make it able to establish companies and industries for the manufacture and production of all kinds of goods and services. And so, the North is not a poor region as it is being iterated; it is just reeling in misplaced priorities and elite complacency. As it were, if the North had kept to the trajectory of the examples set by Sardauna and Balewa who set up viable business ventures and strategic institutions, built manpower, and laid solid economic framework for the future, all of which have now gone with the winds, it won’t be crying wolf now. However, what it requires now is the political will and negotiation skills necessary in politics to turn things around for the better. To be sure, politics is about negotiation over scarce resources. Therefore, the sharper your negotiation skills are, your chances of gaining a competitive advantage in a political arrangement will increase.

For instance, what stops the North from negotiating a tax credit scheme to revamp the moribund textile industries in the North? Why did the North allow the Bank of the North to be taken over? Why didn’t the Northern political establishment say anything about the stoppage of the dredging of the River Niger and the abandonment of the Baro Port? What happened to its cotton potential and the ginnery enterprises? What is it doing with the vast water bodies and arable land? So many questions, indeed.

The VAT debacle has provided the North an opportunity for negotiation and introspection. The present atmosphere of regional competition makes the matter even more enjoyable. Therefore, the North must muster every skill to get a better deal out of this debacle and seize this moment to modernise its social and economic institutions for more financial inclusiveness and overall economic growth. This is a time to change the old habits and embrace progressive ideas. It is instructive how the North raised its voice in unison to object to the Tax Reform Bills. It is equally expedient for the North to rise in unison against the spate of insecurity bedevilling the entire region. Let the Governors, the Emirs, the Ulamas, and the whole people equally give marching orders to their legislators in the National Assembly, as they did on the tax reform bills, to end the insecurity in the region.

Let the North rise against the misplacement of governance priorities and begin to chart the course of modernisation. As recently suggested by the immediate past Executive Chairman of FIRS, Muhammad Nami, the North must take the issue of financial inclusiveness seriously to be able to move on the same pedestal with the other regions of the country. There are probably billions of naira circulating in the North outside the banking system because the handlers detest bank interest. Indeed, the North has no other option but to start modernising now.

For instance, what stops the Northern stakeholders from using diplomatic instruments to get Middle Eastern banks like Al Rajhi to set up branches in key Northern states’ capitals to attract those outside the banking system to bank their money? It must be stressed that transactions through the banking system and the embrace of the BVN and NIN, which ensure that everybody is captured in the National Database and the overall fiscal construct of the country, are no longer optional; it should be considered obligatory on everybody, whether young or old, educated or not. Therefore, the North must shift away from the traditional way of doing business and tax collection to a more financially inclusive way to benefit from the VAT windfall.

* Dr. Abdullahi Ismaila Ahmad is the Director, Communications & Liaison Department, Federal Inland Revenue Service.

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This followed the directive for the erstwhile FIRS chairman, Mr. Muhammad Nami, to proceed on three months of pre-retirement leave, as provisioned by Public Service Rule (PSR) 120243, with immediate effect, leading to his eventual retirement from service on December 8, 2023.

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Adedeji, according to a statement by the Special Adviser to the President on Media and Publicity, Ajuri Ngelale, was appointed in acting capacity for a 90-day period before his subsequent confirmation as the substantive Executive Chairman of the Federal Inland Revenue Service for a term of four years in the first instance.

Adedeji is a first-class graduate in accounting from the Obafemi Awolowo University.

He most recently served the nation as the Special Adviser to the President on Revenue, following meritorious service terms as the Oyo State Commissioner for Finance and as the Executive Secretary / CEO of the National Sugar Development Council, NSDC.

Ngelale said by the directives of the president, the new appointment took immediate effect.

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This was the position stated by the chairman of the Joint Tax Board, JTB, Mr. Muhammad Nami, who is also the Executive Chairman of the Federal Inland Revenue Service, FIRS, at the 153rd Meeting of the Board which held today in Abuja with the theme: “Harmonization and codification of taxes at the National and Sub-national levels: Key to achieving a tax friendly environment in Nigeria.”

Nami, while delivering his address to the Board stated that for progress to be made in taxation, tax authorities must continue to explore and adopt measures and innovative initiatives that would lead to the optimisation of tax revenue for all levels of government.

“As the new administrations attempt to address the many socio-economic challenges facing the nation on many fronts, it becomes imperative for all the levers of state to shake-off any lethargic antecedents and focus on the goal of a national resurgence.

“The unique and privileged offices we occupy as drivers of the nation’s tax administration processes presents us with a rare opportunity to take hard, but necessary decisions that are expected to yield long term benefits and add immense value to our collective prosperity as a nation.

READ ALSO: FIRS rakes in record N5.5 trillion in six months

“In recent years, especially since the dawn of our current democratic dispensation, the importance of taxation has continued to be reiterated and reinforced by all, and the critical role that tax-revenue plays in funding government and governance cannot be over-emphasized.

“However, as we continue to make progress in our unique model of taxation, it is appropriate that we continue to explore and adopt measures and innovative initiatives that will lead to the optimization of tax revenue for all the levels of government, in more efficient, more effective, more inclusive, and more sustainable ways.

“It is only by achieving this, that our efforts as tax administrators can trigger the manner of activity required in the productive sectors of our economy, towards achieving the immense economic potentials that we are capable of,” Mr. Nami said.

The chairman of the Joint Tax Board further assured Executive Chairmen of State Revenue Authorities present that given the thrust of the current administration’s tax policy direction, the country was on the pathway to eradicating multiplicity of taxes as a core of its overall economic regeneration objectives.

Mr. Taiwo Oyedele, Chairman, Presidential Fiscal Policy & Tax Reforms Committee, while delivering a presentation on the theme of the meeting highlighted that multiple taxation was causing low tax morale in the country, as well as discouraging investments, while creating room for corruption and making doing business difficult.

The Presidential Fiscal Policy and Tax Reforms Committee Chairman further noted that the solution to the country’s revenue challenges is not to introduce more taxes, but to focus on the few taxes that are high yielding, noting that with these, tax authorities would be able to collect far more than is currently being collected.

Mr. Taiwo stated that for the government to raise more revenue, it needed to get to a point where the total number of taxes collected at the Federal, State and Local government levels would be at a single digit.

“We also need to clarify on taxing rights. We need to integrate tax collection functions—that is, all revenues that are to be collected must be collected by a single revenue agency. Government must also do well to fund our tax agencies well. We also need to harmonise revenue administration and simplify our approach to tax compliance,” Mr. Taiwo stated.

He further advocated for the country’s tax authorities to use more technology, review the country’s constitution and tax laws, as well revisit Nigeria’s concept of fiscal federalism.

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This is the highest tax revenue collection ever recorded by the Service in any first six months of a fiscal year.

The executive chairman of the FIRS, Mr. Muhammad Nami, stated this while presenting the 2023-2024 tax revenue outlook to the National Economic Council at its meeting held on Thursday, July 20, 2023, at the Presidential Villa, Abuja.

The presentation, which contained FIRS’ 2023 Half-Year Collection Report, showed that the FIRS achieved over one hundred per cent of its target for the first-half of the year when compared with a mid-year target of N5.3 trillion.

According to the report, tax revenue collected from the oil sector from January to June 2023, stood at N2.03 trillion, as against a target of N2.3 trillion; while non-oil tax collection stood at N3.76 trillion, as against a target of N2.98 trillion.

Nami, in his presentation, further stated that the Service collected a total of N1.65 trillion tax revenues in June 2023.

This sum is the highest tax revenue collected by the Service in any single month.

READ ALSO: ATAF: Nami leads call for effective revenue utilisation by govts

Speaking to what he described as “a good head start, despite stubborn headwinds,” Nami attributed the excellent performance to improved voluntary tax compliance enabled by the automation of FIRS’ tax administrative processes.

“This is a good head start as we work towards meeting our target for the year. And it was achieved despite stubborn headwinds such as the impact of the currency redesign and 2023 General Elections on the economy in the first and second quarters of 2023”, said Nami.

“This half-year performance was achieved as a result of improved voluntary tax compliance by taxpayers, the continued improvement of automation of our tax administration processes, including the updated VAT filing processes; as well as our dogged engagement with stakeholders in both the formal and informal sectors of the economy,” he concluded.

Commenting on the outlook for the remainder half of the year, the FIRS Executive Chairman gave assurances that the country should expect “better days ahead” in terms of tax revenue collection.

“We believe that the performance in the second half of the year would be better considering the continuing improvement to our tax administration processes and positive impact of current government’s policies on the economy,” said the executive chairman.

It would be recalled that the Service achieved a total collection of N10.1 trillion in the year 2022, being the highest tax collection ever made by the FIRS in a single year.

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The association which has a membership of well over 40 million traders across the country’s 774 local governments, and 36 states plus the Federal Capital Territory is the biggest player in Nigeria’s market space.

The details of the FIRS’ partnership with MATAN was disclosed yesterday at a stakeholders engagement programme on the VAT DIRECT Initiative, held in Lagos State.

The partnership will see the FIRS collaborating with the association to deploy technology to enumerate traders for collecting and remitting VAT to the Service, consequently leading to an expansion of the tax net and increased revenue for the federation.

The VAT DIRECT Initiative, VDI, is a programme designed to foster collaboration between the FIRS and the market place, especially the informal sector, in the collection and remittance of the Value Added Tax, VAT, using technology.

Speaking during the stakeholder engagement, Mr. Muhammad Nami, executive chairman of FIRS, highlighted that the initiative was the first of its kind, and that it was crucial to revenue generation and also to eliminating multiple taxation, especially from the informal sector.

Nami who is also the chairman of the Joint Tax Board, JTB, further stated that the government was worried about the multiplicity of taxes, and that the service and JTB were working on various modalities of addressing the challenge and that the partnership had laid a very good foundation for the government to address the issue of multiple taxation and extortion by tax officials, tax agents and touts in the market place.

He further noted that the service would collaborate with security agencies, especially the Nigeria Police, to deal with illegal tax collection by touts in markets.

“One important area of our collaboration is the issue of providing adequate security in the markets. We are aware of the challenges that you have faced in the past with miscreants, self-imposed tax collection agents, and touts.

“I want to assure you that as part of this initiative, we will be collaborating with the relevant security agencies particularly the Nigeria Police Force to tackle all forms of touting and illegal tax collection by miscreants and keep them away from your markets.”

Nami further noted that the success of the collaboration would lead to increased revenue for the country, and in turn provide government the needed resources to fund infrastructure and other social amenities.

“The successful outcome of this collaboration and additional revenue accruable will have multiplier effects on all sectors of the economy as the government will have more revenue to provide the needed social amenities and infrastructure in critical sectors.

“An improved VAT collection will improve the revenue base of the States and Local Governments at the sub-national level and the citizens will be the ultimate beneficiaries.

“This initiative is very important to the government, particularly at this moment of dwindling revenues from the petroleum sector and therefore, requires that we put all hands on deck and optimally explore all available opportunities.

“The administration of VAT in the informal sector is characterized mainly by a low level of compliance and a lack of awareness in terms of obligation and liability. It, therefore, becomes necessary to leverage the MATAN platform to positively change the status quo,” Mr. Nami stated.

He also noted that to ensure transparency and accountability of the project operations, a combined monitoring and evaluation team comprising both organisations would be formed.

During the stakeholder engagement, the Executive Chairman, FIRS, also unveiled the Identity Card that is to be given to each trader upon enumeration; the card contains their tax identification number and other personal details.

The VAT Direct Initiative Stakeholder Engagement was attended by the Secretary of the Joint Tax Board, representatives from Deposit Money Banks, Iyalojas of Markets across the country, members of various trade clusters, representatives from all major markets across the country, as well as officers of the Federal Inland Revenue Service.

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Nami, who received the award in Lagos yesterday was described by the president of the association, Mallam Tijani Musa Isa, as an unassuming and humble achiever who had led the FIRS to excel in the international tax circle despite global economic challenges by achieving milestones in revenue collection.

“This Award is in recognition for your positive impact in the society. You have made significant contribution to the institute and to Nigeria. The governing board deemed it fit to acknowledge the role you have played and your outstanding achievements,” Isa noted.

In his citation, Mr. Muhammad Nami was described as “a go-getter and an ingenious leader.”

It further stated that “the reforms he is implementing at FIRS attest to his dexterity, visionary leadership and patriotism. Under his visionary leadership, the FIRS in 2022 achieved an unprecedented revenue collection of N10.1 trillion, which is the highest tax collection ever made in the history of the country.”

While receiving the award, the FIRS boss appreciated the council members of the institute, saying that he had been lucky to work with their members through his 32 year career.

“Since I left the university, over 32 years ago, I have had the privilege and luck to be directly and indirectly associated with ICAN members: from the PKF, to Manam Professional Services, and now I am working directly with well over 3,000 members of this institute as the Executive Chairman of the FIRS.

“I feel blessed by this honour and privilege. I am grateful to God, and to all of you who have found me worthy of this recognition. I pray God rewards all of you enormously,” he noted.

Nami dedicated the award to his alma mater from primary to tertiary levels; his former colleagues at the Presidential Committee on Audit of Stolen Recovered Stolen Assets; members of the Tax Advisory Committee of the FIRS; all taxpayers; the Board Members, Management and staff of the FIRS, and his family members.

In a similar recognition earlier in the week, on Thursday, May 4, 2023, the FIRS boss was named the winner of the BusinessDay Excellence in Public Service Award 2022, at the BusinessDay States Competitiveness And Good Governance Awards 2022.

The country’s influential business newspaper explained that it named him the winner of the award for his “visionary and leadership qualities [that] has brought tremendous change to the FIRS.”

It further noted that: “Under your leadership, you transformed the tax administration and compliance landscape in Nigeria. You deployed the revolutionary TaxPro Max: FIRS’ homegrown digital platform for tax administration which allows taxpayers to register, file returns and pay their taxes easily from any location other than their respective tax offices.

“You have repositioned the operations and staff of the FIRS, and introduced technological tools to institute more transparency, accountability, and effectiveness, which in turn has translated into the increased capacity to deliver on the mandate with results.”

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Making the call on behalf of the country, Mr. Muhammad Nami, the Executive Chairman of the Federal Inland Revenue Service, FIRS, stated this while delivering Nigeria’s Statement at the Economic and Social Council, ECOSOC, Special Meeting on International Cooperation in Tax Matters, held on Friday, at the ECOSOC Chamber, United Nations Headquarters, New York.

Mr. Nami noted that the Nigerian delegation is concerned about the global minimum tax as put forward by the OECD – Inclusive Framework, because of its low rate and the way it was negotiated to benefit the home countries of multinationals.

“My delegation is concerned about the global minimum tax,” Mr. Nami noted, “because of its low rate and the way it was negotiated to benefit the home countries of multinationals, which are mostly in developed countries.”

Speaking further, the head of Nigeria’s apex tax authority urged the meeting to discuss how “a UN instrument on tax cooperation can both build on work that has already been done in a way that guarantees fairness and equity.”

He also said that Nigeria looked forward to views on “enforcement mechanisms for a binding multilateral tax convention, noting the challenges that developing and developed countries have experienced with investment treaty arbitration.”

Mr. Muhammad Nami, in the country’s statement pointed out that the capacity of countries to attain the 2030 Sustainable Development Goals were hinged on having the requisite funding “in delivering critical public services” towards the SDGs.

Nigeria, while calling for a global taxation regime under the United Nations, harped on the importance of enhancing domestic resource mobilization among member states to address their economic challenges.

“The promotion of inclusive International Tax Cooperation remains a critical subject in the attainment of the 2030 Sustainable Development Goals (SDGs).

“Today a global taxation regime under the UN is urgently needed to enable states effectively mobilize domestic revenues to address the multiple economic and other crises impacting our efforts in the achievement of the 2030 SDGs.

“Domestic public resource mobilization is critical to this effort because of its vital role in delivering critical public services and advancing even progress towards the sustainable development agenda.

“Developing countries are taking seriously the challenge of financing sustainable development. My delegation underscores the importance of enhancing domestic resource mobilization, good governance and investment in our common African goal embodied in the Agenda 2063, and in the global goals spelled out in the 2030 Agenda,” Mr. Nami stated.

He further commended African countries for strengthening their participation in international tax cooperation efforts, as well as the strides they had made “in closing loopholes and countering base erosion and profit shifting.”

He however expressed concerns that “while much good work has been done, much more remains to be made towards a fully inclusive process, both domestically and internationally and ensuring that all taxpayers are making their fair contributions.”

The United Nations Economic and Social Council, UN ECOSOC, Special Meeting on International Cooperation in Tax Matters is an annual meeting of ECOSOC members, senior representatives of national tax authorities, relevant international organizations, civil society and academia that discusses issues of taxation as it affects the globe. Members, during this meeting, deliver action-oriented exchanges and design best-practices on international tax issues.

This year’s meeting provided a forum for member states, members of the UN Tax Committee, international organisations and other stakeholders to discuss the promotion of inclusive and effective international tax cooperation at the United Nations.

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The President of the Commonwealth Association of Tax Administrators (CATA), and Executive Chairman, Federal Inland Revenue Service (FIRS), Mr. Muhammad Nami, made the declaration in his charge to the 2022 CATA Senior Leadership cohort, during the closing ceremony of the programme held at His Majesty’s Treasury Headquarters, London, United Kingdom, on Friday.

Nami, in his remarks, highlighted that due to technological advancements in actualising human needs, fulfilling social interactions and conducting commercial activities, the way and manner of tax administration was constantly changing.

He thus called for tax administrators to keep up with the times by improving on their skills and competence in line with the changes.

“The global tax arena is continually changing,” he noted.

“The growing reliance on technology for much of basic human needs, social interactions and business dealings means that the tax-turf remains in a state of constant flux.

“The taxman is only able to match the depth and pace of the changes if equipped with relevant, adequate and up-to-date skills.”

The CATA President praised the Commonwealth association for its investments and contributions through its Senior Leadership Programme, which he noted had helped bridge the capacity gaps of tax officials in member countries.

“I am glad to note that CATA has, over the years, continued to organise the Senior Leadership Programme in order to meet the capacity development needs of tax officials in commonwealth countries. It has become a tradition for CATA to provide participants at this programme with top-notch tuition using case studies in a fun-filled environment.

“The 2022 edition did not depart from this tradition.  The classes, according to reports, were very interactive all through the various sessions whether at home, in India or in the UK.

“Without doubt, the capacity of participants to lead themselves, to lead others, and to lead their functional units have been greatly enhanced.”

Quoting the renowned African philosophy of Ubuntu, “I am, because we are,” Nami urged the 20 participants drawn from senior tax officials in commonwealth countries to put the knowledge and skills they had acquired during the programme into good use for the benefit of their countries, while further calling on the cohort to maintain and sustain the network of colleagues they had met during the programme.

The CATA Senior Leadership Programme is a yearly senior-level Leadership Programme delivered by His Majesty’s Revenue and Customs, HMRC, on behalf of the Commonwealth Association of Tax Administrators. It pools together senior leaders of tax authorities in Commonwealth countries to equip them with the requisite leadership skills to navigate their organisations in a dynamic and complex landscape.

The programme recognises the importance of good leadership to result-driven tax administration in the 21st century.

The 2022 edition combined residencies in India and the UK, accompanied with virtual sessions, and work within the domestic tax authorities of participants.

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Mr. Nami stated this while speaking to journalists after receiving the award at the 14th edition of the Leadership Annual Conference and Awards, held at the International Conference Centre, Abuja yesterday.

“We feel honoured to receive this award, and in fact feel more indebted to Nigerians to do better in the years to come,” he noted.

“We are grateful to the media, and most especially the Leadership Newspaper for finding us worthy of this honour.

“Permit me to dedicate this award to the FIRS family, and rename it as ‘the Leadership Public Institution of the Year Award 2022’—not Muhammad Nami’s. This award is the result of a collective effort. It is because of team work that we have been able to achieve what we have done at the FIRS.”

The FIRS boss stated that the award was a recognition for the reforms that the Service had carried out, and their consequent results.

“We have carried out so many reforms that have brought us to this proud moment: we have rebuilt the institutional structure of the Service; we have ensured we carry our taxpayers along; we have created an environment for ease of tax payment; we have deployed big data in our operations; we have taken our stakeholders—including the media, seriously; among many others.

“When we came on board, we met a Service that was collecting tax revenue within the region of 5 trillion for a period of nine years. In 2021 we broke that jinx, and crossed over the 6-trillion Naira mark. We did not rest on our oars, in 2022, by sheer determination and collective effort we raked in N10.1 trillion in tax revenue—the highest sum in our nation’s history.”

Speaking on the prospects for the year 2023, Mr. Muhammad Nami stated that the FIRS would do everything within its means to ensure that government did not lack the needed resources to cater for the needs of the Nigerian people.

“It is not easy to collect taxes. I believe that after the issue of tackling insecurity, the second most difficult task for our government is to collect taxes. But we will continue to appeal to Nigerians to pay their taxes, and help them understand that without taxes, salaries cannot be paid; without taxes, roads cannot be built; without taxes our lives and properties cannot be secured.

“I want to assure Nigerians that we would do everything within our means to ensure that the governments at the three tiers are funded to provide these services and needs to the Nigerian people.

“We have already commenced the journey to do better, well before the new year. We have appointed telecommunication companies and deposit money banks to act as agents of VAT collection for us. They would deduct VAT at source from their Contractors and, or Service providers, and remit same to us.

“Also, we are extending our collaboration further, beyond local stakeholders and engaging with the international community to ensure that we have seamless flow of information required for tax administration.

“We would also work tirelessly to ensure that we improve our automation so that we are able to serve our taxpayers better than previous years.”

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The Service made this known in its “FIRS 2022 Performance Update,” report signed by its Executive Chairman, Mr. Muhammad Nami, and released to the public on Monday, after his briefing with President Muhammadu Buhari.

“The FIRS, in the year 2022 collected a total of N10.1 trillion in both oil (N4.09 trillion) and non-oil (N5.96 trillion) revenues as against a target of N10.44 trillion.

“Companies Income Tax contributed N2.83 trillion; Value Added Tax N2.51 trillion; Electronic Money Transfer Levy N125.67 billion and Earmarked Taxes N353.69 billion.

“Non-oil taxes contributed 59% of the total collection in the year, while oil tax collection stood at 41% of total collection,” the report noted.

It is the first time that the FIRS will cross the N10 trillion mark in tax revenue collection.

The Performance Update Report further clarified that included in the total revenue sum is the sum of N146.27 billion which is the total value of certificates issued by the Service to private investors and NNPC for road infrastructure under the Road Infrastructure Development Refurbishment Investment Tax Credit Scheme created by Executive Order No. 007 of 2019.

The report also stated that the N10.1 trillion is exclusive of tax waived on account of various tax incentives granted under the respective laws, which amounted to N1,805,040,163,008.

Providing perspective to this unprecedented tax collection, the FIRS noted in the Performance Update that the Muhammad Nami-led management upon assumption of office came up with a four-point focus, namely: administrative and operational restructuring; making the service customer-focused; creating a data-centric institution; and automation of administrative and operational processes.

It further noted that over the period of 2020 to 2022, the management had introduced reforms bordering around these four-point focus which were producing results.

“The reforms introduced at different times from 2020 are gradually yielding fruits.  By the close of 2022, the Service had fully restructured the administration of the Service for maximum efficiency and achieved internal cohesion such that all functional units are working in unison towards the achievement of set goals.

“As a result of conducive environment created for staff, officers of the Service are pulling their weight on the global stage with international recognitions and awards;

“The Service had also automated most of the administrative and operational processes.  A major leap was the full deployment of the TaxPro Max for end-to-end administration of taxes in June 2021.  The module for the automated TCC went live 1st January 2023 while taxpayers had already downloaded over 1,000 TCCs this year without having to visit FIRS office,” the report read.

It also noted that the Service had operationalised its data mining and analysis system thereby allowing for data-backed taxpayer profiling.

Other reforms the Service introduced in this period focused on the detoxification of the tax environment by ridding it of mutual mistrust, negative tax morale, and tax evasion, through effective taxpayer education, open engagement with stakeholders and improved services.

It noted that it was courtesy of the reforms, framed around the four-focus points, that the Service was able to achieve the collection.

Mr. Muhammad Nami, Executive Chairman of the FIRS, commenting on the N10.1 trillion record tax collection achieved under his leadership stated that that was made possible through “dogged implementation of strategic reforms over the past two years; a renewed commitment by officers of the Service, accompanied with a boosted morale; as well as the innovative deployment of technology for automation of both tax administration and operational processes.

“This collection was possible through collaboration with our stakeholders, from our colleagues at the Executive branch of government, to the members of the judiciary, to our brothers and sisters at the National Assembly, as well as the tax advisory committee, professional bodies, unions, and most crucially our taxpayers.”

Speaking on the outlook for 2023, Nami stated that the Service would build on the current reforms, achieve full automation and continue to establish a resilient Service that would continue to provide sustainable tax revenue to fund the government.

“We intend to maintain, and even improve on the momentum in 2023,” he stated.

“We have peaked, but this is not certainly our peak. In fact, my hope is that this would be the least sum the Service would ever collect going forward.

“Our goal is to identify more areas where we can improve on in the delivery and efficiency of our collection; and plug loopholes, while deploying innovative reforms in data and artificial intelligence.

“Ultimately, we believe that the FIRS can shoulder the responsibility of providing revenue needed for the governments across the federation to cater for the needs of the Nigerian people through taxes.

“This is feasible once we get the much-desired support from the three tiers and arms of government, as well as all stakeholders.”

The FIRS appreciated President Muhammadu Buhari for his support, as well as the Minister of Finance, Budget and National Planning, Mrs. Zainab Ahmed and the Minister of State, Mr. Clem Agba.

“FIRS management uses this medium to commend all patriotic taxpayers who paid their taxes correctly, stakeholders for their support, and officers of the Service for their dedication to duty.

“The Service equally owes its achievements in 2022 to effective leadership of the Honourable Minister of Finance, Budget and National Planning – Mrs Zainab Ahmed, her brother, the Minister of State – Mr Clem Agba, members of the National Assembly and the fatherly support of the President and Commander-in-chief of the Armed Forces of Nigeria – Muhammadu Buhari.”

This is the second consecutive year that the Service will be recording unprecedented tax collection.

In 2021, the Service achieved a record tax collection of N6.405 trillion, being over hundred per cent of its collection target for the year, as well as the first time that the Service will cross the six trillion mark.

In 2022, building on the success of the preceding year, the Service achieved a record collection of N10.1 trillion, being over 96% of its collection target for the year, and the first time the Service will cross the ten trillion mark.

This collection represents an over one hundred per cent leap from the tax collected by the Service in 2020—the first year of the current management of the Service.

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