Business Hilights

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Adeosun Buhari

How FG spent N483m to collect only N1.2tn tax revenue in 2016

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Indications have emerged that a sizable portion of federal government tax revenue is dried up along the collection channel from the handling banks to switching platforms for payments.

Otherwise, in 2016, whereas confirmed taxes in government coffers stood at about N1.2tn, about the sum of N482.924m has been pocketed as collecting fees this is aside the salaries of the staff of federal Inland Revenue Service (FIRS).

Details of the document sighted by Business Hilights correspondent at the FIRS office in Abuja showed that out of the N482.924m collection fee paid by government, N362.198m representing 15 percent went to banks as collection fees while N120.731m, representing 10 percent for InterSwitch for switching them to the CBN.

Out of the currently available N1.2tn non-oil formed the major bulk of the collection, with oil contributing only the sum of N167.013bn.

Several financial experts, who barred their minds on the percentage paid for tax collection, decried the volume of collection fee, saying government need to recalibrate what it pays to collect taxes so that the government can really earn enough for the development of infrastructure and running of government businesses and funding of budget. To them, it is not wise to spend more than 10 per cent to collect federal government taxes.


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