.Reps Probe FIRS Accounting Procedures
Hon. Yakubu Dogara, Speaker of the House of Representatives, has stated that an improved method of collecting taxes in the country can generate the revenue necessary to finance the N6.060 trilion 2016 budget.
In view of this, Dogara reiterated the importance of a strong tax regime aided by an efficient and virile accounting system in the successful diversification of any economy.
Speaker Dogara stated this in Abuja, Wednesday while addressing participants at the opening of an investigative hearing into the Accounting Procedures of the Federal Inland Revenue Service (FIRS) organised by the House Ad-hoc Committee set up for that purpose.
Represented by his Deputy, Hon. Yusuff Sulaiman Lasun, Dogara said the hearing was necessitated by a resolution of the House, which caused the setting up the Ad-hoc committee with a view to ascertaining the accounting framework currently in use, and examine its effectiveness in line with current economic realities.
“You will recall that the House on its first sitting on Tuesday, August 11, 2015 reached a resolution that mandated this Ad-hoc Commitee to investigate the accounting procedures of the Federal Inland Revenue Service with a view to ensuring adherence to constitutional and statutory provision.
“This investigative hearing is coming at a time when our economy is facing acute revenue shortfall owing to the global downturn in the oil market. So, there’s no better time that we must diversify our revenue base and strengthen our revenue collection system than now.
“The negative consequences of our mono-product economy as visited on us have created the need for more revenue sources targeting alternatives going forward. Accordingly, unless urgent steps are taken to make our tax system both levy and collection more effective, there’s a great difficulty ahead of us,” Dogara said.
He stressed that the exercise was part of legislative contribution towards supporting government effort at repositioning the economy for meeting the ever-growing needs of the populace with regards to effective budget financing.
“This exercise is therefore part of legislative effort aimed at complementing government plans toward boosting its revenue generation as the nation strives to check its over dependent on oil. I’m of the firm belief that a properly structured and efficient revenue service could generate and even surpass the N6.060 trillion required to fund the 2016 budget.
“This is not an over-ambitious expectation, bearing in mind that other countries that are less endowed than Nigeria are posting higher figures from internally generated revenue to finance their budgets.
“One of the major reasons is due to the fact that Nigeria as a country still lags behind other emerging markets in our evaluation of tax revenue as a percentage of our Gross Domestic Product.
“It’s important to note that while tax policies and tax laws create the framework for improved tax revenues, the actual level of taxes which flow into government revenue largely depends on the efficiency and effectiveness of the accounting procedures adopted by the revenue administration within the economy,” he said.
Earlier, Hon. Michael Enyong, the chairman of the Ad-hoc committee, in his address notified participants of a motion which came before the House disclosing that in 2014, revenue from the FIRS amounted to N4.69 trillion while the National budget for that year stood at N4.669 trillion.
He said: “We can infer from this that if revenue from tax is properly administered transparently, accountably, diligently, it will be sufficient to fund the national budget”.
“Over reliance on oil revenue is inadequate, hence the country must focus on a more reliable and predictable source of revenue which, without doubt, is taxation.
“The primary focus of this Ad-hoc committee will be to scrutinise the accounting procedure and calculations of the 4 per cent of this non-oil tax revenue which the service is empowered to retain as operational cost which in 2014 stood at N89.6billion,” he said.
The lawmaker stressed that the investigation was not meant to witch-hunt anybody or organisation but only aimed at providing adequate framework for effective taxation and tax administration in the country.
Government revenue generating agencies, private corporations as well as brilliant minds from the accounting profession within and outside Nigeria were all represented at the hearing.