How autonomy boosted tax revenue from N1.8tr to N4.5tr, by FIRS
The financial and administrative autonomy granted the Federal Inland Revenue Service (FIRS) has bolstered tax revenue generation from N1.8 trillion in 2007 to N4.5 trillion in 2015.
Lagos State, which also has tax autonomy, grew its revenue from N50 billion in 2007 to N270 billion within the period under review.
The executive chairman of FIRS, Tunde Fowler, reeled out the figures in South Africa, while underscoring the importance of autonomy to tax entities in Africa.
Addressing, at a lecture, chief executives of African tax authorities at the African Tax Administration Forum and International Monetary Fund (ATAF-IMF) seminar in Cape Town, South Africa, Fowler urged leaders to grant autonomy to their revenue authorities, saying it would strengthen tax institutions and prime them to generate more revenue for their countries.
The theme of the seminar was Board Governance in African Revenue Authorities.
Fowler, who midwifed the autonomy of Lagos Internal Revenue Service (LIRS), said: “Revenue authorities across Africa have the potentials to generate funding for their governments, and they will perform better if they are allowed to fully be in charge of their day-to-day operations and are empowered to hire staff, pay competitive salaries and provide regular training for staff.”
He added: “The compelling evidence from Nigeria’s experience is that wherever revenue authorities have been granted operational, administrative and financial autonomy and allowed to operate with minimal civil service bureaucratic encumbrances, revenue administration has been enhanced, and tax collection performance has gone up significantly.
“Autonomous revenue authorities with independent boards have proven to be beneficial for the actualisation of their mandate to generate funding that governments require for projects and programmes.”
The FIRS chairman said while there is no ‘one size fits all’ approach, a good way to start is put in place requisite legal and administrative framework, to ensure that the revenue authorities can function with less public service bottlenecks and have access to resources required to deliver on their mandate for domestic resource mobilisation and funding for governments.
He noted that support from political office holders and policy direction from supervisory ministries of finance would be critical to the success of revenue authorities.